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<SEC-DOCUMENT>0001137171-06-002048.txt : 20061109
<SEC-HEADER>0001137171-06-002048.hdr.sgml : 20061109
<ACCEPTANCE-DATETIME>20061109092345
ACCESSION NUMBER:		0001137171-06-002048
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20061107
FILED AS OF DATE:		20061109
DATE AS OF CHANGE:		20061109

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PAN AMERICAN SILVER CORP
		CENTRAL INDEX KEY:			0000771992
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-13727
		FILM NUMBER:		061199673

	BUSINESS ADDRESS:	
		STREET 1:		1500-625 HOWE STREET
		CITY:			VANCOUVER BC CANADA
		STATE:			A1
		ZIP:			V6C 2T6

	MAIL ADDRESS:	
		STREET 1:		1500 625 HOWE ST
		CITY:			VANCOUVER BC V6C 2T6
		STATE:			A1
		ZIP:			999999999

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PAN AMERICAN MINERALS CORP
		DATE OF NAME CHANGE:	19950608
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>panamerican6k110906.htm
<DESCRIPTION>PAN AMERICAN SILVER CORP. FORM 6-K
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>CC Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
<META NAME="author" CONTENT="lscott">
<META NAME="date" CONTENT="04/18/2006">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>FORM
  6-K</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>SECURITIES
  AND EXCHANGE COMMISSION</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Washington,
  D.C. 20549</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Report
  of Foreign Private Issuer</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Pursuant
  to Rule 13a-16 or 15d-16</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>of
  the Securities Exchange Act of 1934</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">For
  the month of November, 2006</font>
  <p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Commission
  File Number: 000-13727</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>Pan
  American Silver Corp.</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Translation
  of registrant's name into English)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <br>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>1500-625
  HOWE STREET</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>VANCOUVER
  BC CANADA V6C 2T6</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Address
  of principal executive offices)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Indicate
  by check mark whether the registrant files or will file annual reports under
  cover Form 20-F or Form 40-F.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Form
  20-F___ &nbsp;&nbsp;Form 40-F &nbsp;&nbsp;&nbsp;<u>&nbsp;&nbsp;X&nbsp;&nbsp;</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
  <p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Indicate
  by check mark if the registrant is submitting the Form 6-K in paper as
  permitted by Regulation S-T Rule 101(b)(1):&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font>
  <p><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Indicate
  by check mark if the registrant is submitting the Form 6-K in paper as
  permitted by Regulation S-T Rule 101(b)(7):&nbsp;<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font>
  <p>&nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Indicate
  by check mark whether the registrant by furnishing the information contained
  in this Form is also thereby furnishing the information to the Commission
  pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Yes
  ..... &nbsp;No ..X...</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">If
  &quot;Yes&quot; is marked, indicate below the file number assigned to the
  registrant in connection with Rule 12g3-2(b): &nbsp;82-________</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
  <b>Exhibit List</b>
  <p align="left">99.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <a href="quarterly.htm">Third
  Quarter Results</a></p>
  <p>&nbsp;</p>
  <p>
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><strong>Signatures</strong></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Pursuant
  to the requirements of the Securities Exchange Act of 1934, the registrant has
  duly caused this report to be signed on its behalf by the undersigned,
  thereunto duly authorized.</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif"><u>Pan
  American Silver Corp.</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Registrant)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Date:
  </font><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">November
  7, 2006</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">By:<u>/s/
  Ross Beaty&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">(Signature)</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">
  <font style="DISPLAY: inline; FONT-SIZE: 10pt; COLOR: #000000; FONT-FAMILY: Times New Roman, serif">Ross
  Beaty, </font><font style="display: inline; font-size: 10pt; color: #000000; font-family: 'Times New Roman', serif">Chairman</font>
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
  &nbsp;
</div>
<div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
  &nbsp;
</div>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
<P style="margin:0pt"><BR></P>
</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>quarterly.htm
<DESCRIPTION>THIRD QUARTER RESULTS
<TEXT>
<!doctype html public "-//IETF//DTD HTML//EN">
<HTML>
<HEAD>
<TITLE>CC Filed by Filing Services Canada Inc. 403-717-3898</TITLE>
<META NAME="author" CONTENT="Pan American Silver">
<META NAME="date" CONTENT="11/07/2006">
</HEAD>
<BODY style="line-height:12pt; font-family:Times New Roman; font-size:10pt; color:#000000">
<P style="line-height: 18.667px; font-family: Arial; font-size: 16px; margin: 0px" align=right><img src="quarterly001.jpg" alt="[quarterly001.jpg]" align=middle height=81 width=324.067><FONT FACE="Arial">&nbsp;</FONT></P>
<P style="margin:0px"><BR></P>
<P style="line-height:16.667px; margin:0px; font-family:Arial; font-size:14px">November 2, 2006</P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px" align=center><B>PAN AMERICAN SILVER REPORTS Q3 RESULTS:</B></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px" align=center><B>RECORD REVENUES &amp; NET INCOME</B></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>(all amounts in US Dollars unless otherwise stated)</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=595.2></TD></TR>
<TR><TD style="border:1px solid #000000" valign=top width=595.2><P style="line-height:17.333px; margin:0px; font-family:Arial; font-size:14.667px"><B>THIRD QUARTER HIGHLIGHTS</B></P>
</TD></TR>
<TR><TD style="border-left:1px solid #000000; border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=595.2><P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">Record metal sales of $64.3 million, up 114% from $30.1 million in third quarter 2005.</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">Record net income of $16.4 million ($0.22/share), up from $0.2 million in Q3 2005.</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">Mine operating earnings of $29.2 million, a five-fold increase over Q3 2005.</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">Cash costs decrease 62% to $1.57 per ounce of silver as compared to Q3 2005.</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">Silver production of 3.2 million ounces.</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">Cash flow from operations of $15.8 million, an increase of $11.5 million over Q3 2005. </FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">Construction of Alamo Dorado mine completed in October 2006.</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">Basic engineering at Manantial Espejo project completed, on schedule.</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:-16.667px; padding-left:48px; text-indent:-24px; font-family:Symbol; font-size:14px" align=justify><FONT FACE="Symbol">&#183;</FONT></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:3.533px; padding-left:48px; text-indent:-12px; font-family:Arial; font-size:14px" align=justify><FONT FACE="Arial">San Vicente mine began processing ore and selling concentrates. </FONT></P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B><U>FINANCIAL RESULTS </U></B></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Pan American Silver Corp. (NASDAQ: PAAS; TSX: PAA) today reported record results for the third quarter ending September 30, 2006. Third quarter sales reached an all time high of $64.3 million, a 114% increase over the year earlier period. Consolidated net income for the quarter established a new Company record at $16.4 million, or $0.22 per share, as compared to $0.2 million, or $nil per share, in the third quarter of 2005. Net income for the third quarter of 2006 included an income tax provision of $8.4 million.</P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Commenting on the quarter, Geoff Burns, President and CEO, said: &#147;As forecast, Pan American Silver again delivered record results as we continue to benefit from strong silver and base metal prices and growing production profile.&#148;</P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Mine operating earnings for the third quarter increased almost 500% to $29.2 million over the $5.0 million recorded in the year-earlier period. The increase is attributed to higher silver prices and higher revenues from base metal production, partially offset by increased operating costs resulting from increases in labour compensation, energy and fuel costs, as well as increased workers&#146; participation costs in Peru.</P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Operating cash flow in the quarter was $15.8 million compared to $4.2 million in the year-earlier period. Working capital at September 30, 2006 was $196.1 million, an increase of $7.1 million from June 30, 2006. The Company&#146;s cash flow from operations plus its liquid assets should be more than sufficient to fund all currently planned capital expenditures, including construction of the Manantial Espejo project and the expansion of the Morococha mine.</P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Consolidated silver production for the third quarter totaled 3.2 million ounces, a slight increaseover Q3 2005. The La Colorada mine continued to ramp up its rate of production during the third quarter, producing 13% more ounces of silver compared to the year earlier period. Processing of ore at the San Vicente mine commenced in August, which added modestly to the Company&#146;s third quarter silver production. Partially offsetting these increases in production were modest production declines at Quiruvilca and Morococha where, as expected, ore grades declined due to the planned extraction of lower grade ore during the quarter. </P>
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<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Consolidated cash costs for the quarter were $1.57 per ounce compared to $4.15 per ounce for the year-earlier period. Byproduct base metal credits continued to have an extremely positive effect on the Company&#146;s cost to produce silver. Morococha was once again the Company&#146;s lowest cost mine, recording cash costs of negative $5.14 per ounce for the third quarter. </P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Ross Beaty, Chairman, stated: &#147;Pan American is thriving today with record financial results, our best balance sheet ever, a well-diversified base of six operating silver mines, one newly constructed mine and another project under development that will double our silver production by 2008. We are also actively exploring in many locations and I am confident that this will lead to great new silver growth opportunities for the long term.&#148;</P>
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<P style="line-height:17.333px; margin-top:0px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B><U>OPERATIONS AND PRODUCTION HIGHLIGHTS</U></B></P>
<P style="line-height:17.333px; margin-top:14.667px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B>PERU</B></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>The <B>Morococha</B> mine contributed 694,984 ounces of silver in the quarter at a cash cost of negative $5.14 per ounce. As anticipated, mill throughput increased steadily throughout the quarter, with the mill posting a new monthly tonnage record by processing just over 56,000 tonnes of ore in August. Production at the mine is expected to continue to increase as mill capacity is ramped up to 60,000 tonnes per month and rehabilitation of the tunnel access to the high grade Buenaventura ore block is completed. </P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Silver production at the <B>Quiruvilca</B> mine was 489,972 ounces for the quarter, and year-to-date production continues to track projections. Cash costs per ounce of production remained extremely low at negative $0.39 per ounce, down from $3.55 per ounce in Q3 2005. </P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Third quarter production at <B>Huaron</B> was 941,569 ounces of silver produced at cash costs of $2.32 per ounce as compared to 940,400 ounces at a cash cost of $5.13 per ounce recorded in the year earlier period. The sustained high production results from the mine are attributed to record mill throughput (offset slightly by lower grades and recovery) that is expected to continue through the balance of 2006 and into 2007. </P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>The <B>Silver Stockpile</B> operation produced 121,327 ounces of silver in the third quarter, which is lower than expected as a result of fewer tonnes being shipped at lower than expected grade. Year-to-date production nevertheless remains within budget and fourth quarter shipments are expected to increase. </P>
<P style="line-height:17.333px; margin-top:14.667px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B>MEXICO</B></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>The commissioning team at the <B>Alamo Dorado</B> mine was assembled in the third quarter and construction of the mine was completed on schedule in October 2006, with silver production set to commence in mid-November. By the end of the quarter, the primary crusher was operative and ore stockpiled ahead of the crusher totaled 345,000 tonnes. Construction expenditures were within 4% of the original budget, totaling approximately $79.9 million. Alamo Dorado is expected to produce an average of 5 million ounces of silver annually.</P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>The <B>La Colorada</B> mine notched another consecutive record producing quarter, with silver production increasing to 923,553 ounces, or 13% more than the year-earlier period. Cash costs increased slightly to $5.92 per ounce of silver, reflecting the fact that mining and processing from the sulphide zone has only reached 50% of planned capacity. Production from the oxide zone continued to meet quarterly and year-to-date forecasts, with slightly lower grades in the third quarter being offset by higher mill throughput and higher than expected recovery rates. By the end of 2006, the sulphide plant is expected to reach full capacity of 200 tonnes per day.</P>
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<P style="line-height:17.333px; margin-top:14.667px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B>ARGENTINA</B></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Basic engineering and plant design for the <B>Manantial Espejo</B> project was substantially completed in the third quarter and site construction planning commenced. Mining crews began ramp development at the Maria mine site area. By the end of the fourth quarter, all surface and underground mining equipment will be on site. Total project commitments at the end of the quarter totaled $7.0 million, primarily for the purchase of mobile equipment and for SAG and ball mill purchases. The project is scheduled to be completed in early 2008 and produce an average of 4.3 million ounces of silver and 62,000 ounces of gold annually.</P>
<P style="line-height:17.333px; margin-top:14.667px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B>BOLIVIA</B></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Following recommencement of milling at the high grade silver-zinc <B>San Vicente</B> mine, the mine contributed a total of 55,370 ounces of silver in the third quarter from ore that had been mined and stockpiled throughout the second quarter. Cash costs per ounce of silver were significantly higher (at $8.09) than the Company&#146;s long-term expectations of $3.50 per ounce as a result of mill start-up costs, costs to warehouse ore not shipped, and higher silver prices which increased royalty payments owed to Comibol, Bolivia&#146;s national mining company. Feasibility analysis and engineering is continuing on a plan to expand mine production and build a new mill on the property. An investment decision is expected in early 2007 and will carefully take into consideration the political climate in Bolivia. The San Vicente mine today represents less than 2% of the book value of Pan American&#146;s 
consolidated operations.</P>
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<P style="line-height:17.333px; margin-top:0px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B><U>EXPLORATION </U></B></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>By the end of the third quarter, the Company had more than 25 active drill rigs at existing operations, development projects and exploration sites. The more notable exploration results came from the Huaron and La Colorada mines.</P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>At Huaron, a total of 24 holes were drilled on site throughout the quarter. Very positive results were obtained at the 250 level, where high grade silver and base metal intersects were found. </P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>At La Colorada, exploration in the third quarter continued to focus on delineation of the new Amolillo vein and Recompensa structure to expand reserves and resources in the area. Primarily as a result of development of the Amolillo deposit, the Company expects to more than replace all reserves mined in 2006. </P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>In the third quarter, the Company set up an exploration office in Ecuador as it initiated exploration efforts within that country. </P>
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<P style="line-height:17.333px; margin-top:0px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B><U>SILVER MARKETS</U></B></P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>The price of silver steadily increased through the first two months of the quarter, reaching a high of $13.50 (London fix) per ounce on September 5, then dropping to a low of $10.70 per ounce in mid-September, only to rebound somewhat by the end of the month to close to the average price for the quarter of approximately $11.70 per ounce.</P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Investment demand for silver remained strong throughout the third quarter, as evidenced by holdings in the silver exchange traded fund (&#147;ETF&#148;), which, by the end of the quarter, reached approximately 105 million ounces of physical silver. To meet this rising demand, the administrators of the ETF, on September 27, filed for registration with the SEC of 15 million additional shares, enabling purchase by the ETF of 150 million additional ounces of physical silver. </P>
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<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Physical interest in the Pan American Silver line of bullion products continues to remain high, as indicated by the sale of the 1,000,000<SUP>th</SUP> ounce of silver by the Northwest Territorial Mint in the third quarter and by the strong demand for the Company&#146;s new 100-ounce silver bar. All Pan American Silver products are available directly through the mint&#146;s website (<FONT COLOR=#0000FF><U>www.silverpa.com</U></FONT>). </P>
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<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>Pan American will host a conference call to discuss its financial and operating results on Friday, November 3, 2006 at 7:00 am PST (10:00 am EST). North American participants please dial toll-free 1-888-694-4728 and international participants please dial 1-973-582-2745. The call may also be accessed from the home page of the Company&#146;s website at <FONT COLOR=#0000FF><U>www.panamericansilver.com</U></FONT>. The call will be available for replay for one week after the call by dialing 1-877-519-4471 (for North American callers) and 1-973-341-3080 (for international callers) and using the replay pin number 7953226.</P>
<P style="line-height:16.667px; margin-top:0px; margin-bottom:7px; font-family:Arial; font-size:14px" align=justify>For more information, please contact: Alexis Stewart, Director Corporate &amp; Investor Relations (604) 684.1175 &nbsp;<FONT COLOR=#0000FF><U>astewart@panamericansilver.com</U></FONT> </P>
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<P style="line-height:16.667px; margin:0px; font-family:Arial; font-size:14px" align=center>- End - </P>
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<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><B>CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</B></P>
<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=justify><I>THIS NEWS RELEASE CONTAINS &#147;FORWARD-LOOKING INFORMATION&#148; WITHIN THE MEANING OF APPLICABLE CANADIAN SECURITIES LEGISLATION. STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION EXPRESS, AS AT THE DATE OF THIS NEWS RELEASE, THE COMPANY&#146;S PLANS, ESTIMATES, FORECASTS, PROJECTIONS, EXPECTATIONS, OR BELIEFS AS TO FUTURE EVENTS OR RESULTS AND THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION TO, UPDATE SUCH STATEMENTS CONTAINING THE FORWARD-LOOKING INFORMATION. GENERALLY, FORWARD-LOOKING INFORMATION CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS &#147;PLANS&#148;, &#147;PROJECTS&#148; OR &#147;PROJECTED&#148;, &#147;EXPECTS&#148; OR &#147;DOES NOT EXPECT&#148;, &#147;IS EXPECTED&#148;, &#147;ESTIMATES&#148;, &#147;FORECASTS&#148;, &#147;SCHEDULED&#148;, &#147;INTENDS&#148;, &#147;ANTICIPATES&#148; OR &#147;DOES NOT ANTICIPATE&#148;, OR &#147;BELIEVES&#148;, OR VARIATIONS
 OF SUCH WORDS AND PHRASES, OR STATEMENTS THAT CERTAIN ACTIONS, EVENTS OR RESULTS &#147;MAY&#148;, &#147;CAN&#148;, &#147;COULD&#148;, &#147;WOULD&#148;, &#147;MIGHT&#148; OR &#147;WILL BE TAKEN&#148;, &#147;OCCUR&#148; OR &#147;BE ACHIEVED&#148;. STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS WITH RESPECT TO TIMING AND BUDGET OF CONSTRUCTION ACTIVITIES AT ALAMO DORADO AND MANANTIAL ESPEJO, THE EXPECTED RESULTS FROM EXPLORATION ACTIVITIES, THE ECONOMIC VIABILITY OF THE DEVELOPMENT OF NEWLY DISCOVERED ORE BODIES, THE ESTIMATION OF FUTURE PRODUCTION LEVELS, EXPECTATIONS REGARDING MINE PRODUCTION COSTS, THE REQUIREMENTS FOR ADDITIONAL CAPITAL, THE RESULTS OF DRILLING, AND PAN AMERICAN SILVER&#146;S COMMITMENT TO, AND PLANS FOR DEVELOPING, NEWLY DISCOVERED AND EXISTING MINERALIZED STRUCTURES. </I></P>
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<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=justify><I>STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, LEVEL OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS OF PAN AMERICAN SILVER AND ITS OPERATIONS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, RISKS RELATED TO TECHNOLOGICAL AND OPERATIONAL NATURE OF THE COMPANY&#146;S BUSINESS, CHANGES IN THE POLITICAL OR ECONOMIC ENVIRONMENT, THE ACTUAL RESULTS OF CURRENT EXPLORATION ACTIVITIES, CONCLUSIONS OF ECONOMIC EVALUATIONS, CHANGES IN PROJECT PARAMETERS TO DEAL WITH UNANTICIPATED ECONOMIC FACTORS, FUTURE PRICES OF SILVER, GOLD AND OTHER BASE METALS, AS WELL AS THOSE FACTORS DESCRIBED IN THE SECTIONS RELATING TO RISK FACTORS OF PAN AMERICAN SILVER&#146;S BUSINESS FILED IN THE COMPANY&#146;S REQUIRED SECURITIES FILINGS ON SEDAR. ALTHOUGH THE COMPANY HAS ATTEMPTE
D TO IDENTIFY IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN FORWARD-LOOKING STATEMENTS, THERE MAY BE OTHER FACTORS THAT CAUSE RESULTS TO BE MATERIALLY DIFFERENT FROM THOSE ANTICIPATED, DESCRIBED, ESTIMATED, ASSESSED OR INTENDED. THERE CAN BE NO ASSURANCE THAT ANY STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION WILL PROVE TO BE ACCURATE AS ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH STATEMENTS. ACCORDINGLY, READERS SHOULD NOT PLACE UNDUE RELIANCE ON STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION.</I></P>
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<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=326></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial"><B>Financial &amp; Operating Highlights</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=252 colspan=6 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>Three months ended</B></P>
</TD><TD width=168 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Nine months ended</B></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD><TD width=168 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=252 colspan=6 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=410 colspan=3><P style="margin:0px; font-family:Arial"><B>Consolidated Financial Highlights (in thousands of US dollars)</B></P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">(Unaudited)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Net income for the period</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">16,355</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:38px; font-family:Arial">172</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">28,558</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:38px; font-family:Arial">920</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Basic income per share</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10.333px; font-family:Arial" align=right>0.22</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>0.00</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>0.39</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>0.01</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Diluted income per share </P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>0.20</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>0.00</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>0.37</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>0.01</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Cash flow from operations</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">15,765</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,227</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">52,509</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">8,463</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Exploration and Project Development expenses </P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,267</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:38px; font-family:Arial">394</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,138</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,703</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Cash and short-term investments</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">181,136</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">68,364</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">181,136</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">68,364</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Working capital</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">196,006</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">85,837</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">196,006</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">85,837</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=422 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Consolidated Ore Milled &amp; Metals Recovered to Concentrate</B></P>
</TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Tonnes milled</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">495,137</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">439,823</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">1,408,755</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">1,251,838</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Silver metal - ounces</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">3,226,775</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">3,202,289</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">9,871,671</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">9,286,658</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Zinc metal - tonnes</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">9,922</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">9,977</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">30,115</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">28,094</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Lead metal - tonnes</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,060</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,113</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">11,927</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">11,492</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Copper metal - tonnes</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,126</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,042</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">3,333</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">3,020</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=422 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Consolidated Cost per Ounce of Silver (net of by-product credits)</B></P>
</TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Total cash cost per ounce *</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1.57</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>4.15</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1.75</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>4.38</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Total production cost per ounce *</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3.28</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.52</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3.34</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.72</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial"><B>In thousands of US dollars</B></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Direct operating costs, royalties, treatment</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">and refining charges</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>46,341</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>30,935</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>126,853</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>89,724</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=326><P style="margin:0px; font-family:Arial">By-product credits</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:4px; font-family:Arial" align=right>(41,690)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:7.333px; font-family:Arial" align=right>(18,769)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:4px; font-family:Arial" align=right>(111,021)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:4px; font-family:Arial" align=right>(52,605)</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Cash operating costs</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:27.6px; font-family:Arial">4,650</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>12,165</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:20.933px; font-family:Arial">15,832</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>37,119</P>
</TD></TR>
<TR><TD style="border-bottom:1.333px solid #000000" valign=bottom width=326><P style="margin:0px; font-family:Arial">Depreciation, amortization and reclamation</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=72><P style="margin:0px; text-indent:27.6px; font-family:Arial">4,476</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3,998</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=72><P style="margin:0px; text-indent:20.933px; font-family:Arial">13,320</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>11,391</P>
</TD></TR>
<TR><TD style="border-bottom:2px solid #000000" valign=bottom width=326><P style="margin:0px; font-family:Arial">Production costs</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>9,126</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>16,163</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>29,151</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>48,511</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=338 colspan=2><P style="margin:0px; font-family:Arial">Payable ounces of silver (used in cost per ounce calculations)`</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.267px; font-family:Arial">2,963,597</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.267px; font-family:Arial">2,930,179</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.267px; font-family:Arial">9,043,186</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.267px; font-family:Arial">8,479,763</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial"><B>Average Metal Prices</B></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Silver - London Fixing per ounce</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>11.70</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>7.07</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>11.21</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>7.06</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Zinc - LME Cash Settlement per tonne</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3,363</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1,298</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>2,966</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1,296</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Lead - LME Cash Settlement per tonne</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1,189</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>892</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1,176</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>952</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial">Copper - LME Cash Settlement per tonne</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>7,670</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3,759</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>6,612</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3,479</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px">5</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; padding-right:-36px; font-family:Arial; font-size:16px; page-break-before:always" align=right>&nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=326></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=77.333></TD><TD width=12></TD><TD width=72></TD></TR>
<TR><TD valign=bottom width=326><P style="margin:0px; font-family:Arial"><B>Mine Operations Highlights</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=257.333 colspan=6 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>Three months ended</B></P>
</TD><TD width=173.333 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Nine months ended</B></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD><TD width=173.333 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=89.333 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>Huaron Mine</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=257.333 colspan=6><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Tonnes milled</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:12.467px; font-family:Arial">185,290</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">167,585</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:14.667px; font-family:Arial">513,235</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">427,814</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average silver grade - grams per tonne</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:35.8px; font-family:Arial">193</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">212</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:38px; font-family:Arial">203</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">214</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average zinc grade</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; font-family:Arial" align=right>2.48%</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:-1.8px; font-family:Arial" align=right>2.70%</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; padding-right:2.6px; font-family:Arial" align=right>2.58%</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:-2.067px; font-family:Arial" align=right>2.86%</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Silver &#150; ounces</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:12.467px; font-family:Arial">941,569</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">940,400</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,773,593</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,747,189</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Zinc &#150; tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:25.8px; font-family:Arial">3,095</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,823</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:28px; font-family:Arial">8,818</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">9,067</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Lead &#150; tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:25.8px; font-family:Arial">1,750</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,635</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:28px; font-family:Arial">5,371</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">5,161</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Copper &#150; tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:35.8px; font-family:Arial">426</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">449</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:28px; font-family:Arial">1,272</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,326</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total cash cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:12.2px; font-family:Arial" align=right>2.32</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.13</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; padding-right:15.667px; font-family:Arial" align=right>2.53</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.04</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total production cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:12.2px; font-family:Arial" align=right>3.67</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>6.37</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; padding-right:15.667px; font-family:Arial" align=right>3.81</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>6.25</P>
</TD></TR>
<TR><TD valign=bottom width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>In thousands of US dollars</B></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Direct operating costs, royalties, treatment and </P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">refining charges</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:19.133px; font-family:Arial">15,929</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:20.933px; font-family:Arial">10,456</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=77.333><P style="margin:0px; text-indent:20.933px; font-family:Arial">42,587</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:20.933px; font-family:Arial">31,456</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">By-product credits</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:10.2px; font-family:Arial">(13,940)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:18.667px; font-family:Arial">(6,067)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=77.333><P style="margin:0px; text-indent:12px; font-family:Arial">(36,202)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:12px; font-family:Arial">(18,872)</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Cash operating costs</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:25.8px; font-family:Arial">1,989</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:27.6px; font-family:Arial">4,389</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:27.6px; font-family:Arial">6,385</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:20.933px; font-family:Arial">12,583</P>
</TD></TR>
<TR><TD style="border-bottom:1.333px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Depreciation, amortization and reclamation</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:25.8px; font-family:Arial">1,149</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:27.6px; font-family:Arial">1,064</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=77.333><P style="margin:0px; text-indent:27.6px; font-family:Arial">3,217</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:27.6px; font-family:Arial">3,026</P>
</TD></TR>
<TR><TD style="border-bottom:2px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Production costs</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:25.8px; font-family:Arial">3,138</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:27.6px; font-family:Arial">5,453</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=77.333><P style="margin:0px; text-indent:27.6px; font-family:Arial">9,602</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:20.933px; font-family:Arial">15,610</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Payable ounces of silver (used in cost per ounce calculation)</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:12.467px; font-family:Arial">856,108</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">856,228</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=77.333><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,521,986</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,496,885</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>Quiruvilca Mine</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Tonnes milled</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:19.133px; font-family:Arial">92,468</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">95,539</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:14.667px; font-family:Arial">282,100</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">275,792</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average silver grade - grams per tonne</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:35.8px; font-family:Arial">199</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">217</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:38px; font-family:Arial">217</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">223</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average zinc grade</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; font-family:Arial" align=right>2.70%</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:-1.8px; font-family:Arial" align=right>3.34%</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; padding-right:2.6px; font-family:Arial" align=right>2.86%</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:-2.067px; font-family:Arial" align=right>3.21%</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Silver - ounces</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:12.467px; font-family:Arial">489,972</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">579,586</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:4.667px; font-family:Arial">1,681,179</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">1,723,973</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Zinc - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:25.8px; font-family:Arial">2,090</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,698</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:28px; font-family:Arial">6,849</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">7,472</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Lead - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:35.8px; font-family:Arial">650</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">754</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:28px; font-family:Arial">1,968</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,103</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Copper - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:35.8px; font-family:Arial">308</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">366</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:28px; font-family:Arial">1,004</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,009</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total cash cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:6.6px; font-family:Arial" align=right>(0.39)</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3.55</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=77.333><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>(0.15)</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>4.07</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total production cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:12.2px; font-family:Arial" align=right>0.99</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>4.10</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=77.333><P style="margin:0px; padding-right:15.333px; font-family:Arial" align=right>1.07</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>4.62</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>In thousands of US dollars</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Direct operating costs, royalties, treatment and</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">refining charges</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:25.8px; font-family:Arial">8,871</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">6,914</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=77.333><P style="margin:0px; text-indent:21.333px; font-family:Arial">25,525</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">20,251</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">By-product credits</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:16.867px; font-family:Arial">(9,048)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(5,007)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=77.333><P style="margin:0px; text-indent:12.4px; font-family:Arial">(25,761)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(13,723)</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Cash operating costs</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:26.867px; font-family:Arial">(176)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,907</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px; text-indent:29.067px; font-family:Arial">(236)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">6,528</P>
</TD></TR>
<TR><TD style="border-bottom:1.333px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Depreciation, amortization and reclamation</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:35.8px; font-family:Arial">628</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">296</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=77.333><P style="margin:0px; text-indent:28px; font-family:Arial">1,902</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">879</P>
</TD></TR>
<TR><TD style="border-bottom:2px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Production costs</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:35.8px; font-family:Arial">451</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,203</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=77.333><P style="margin:0px; text-indent:28px; font-family:Arial">1,666</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">7,407</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Payable ounces of silver (used in cost per ounce calculation)</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:12.467px; font-family:Arial">454,284</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">537,719</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=77.333><P style="margin:0px; text-indent:4.667px; font-family:Arial">1,561,459</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">1,603,593</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=77.333><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px">6</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; padding-right:-36px; font-family:Arial; font-size:16px; page-break-before:always" align=right>&nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR>
<BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=326></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>Three months ended</B></P>
</TD><TD width=168 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Nine months ended</B></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD><TD width=168 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>Morococha Mine(1)</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=252 colspan=6><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Tonnes milled</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">150,191</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">119,953</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">423,451</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">347,023</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average silver grade - grams per tonne</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">176</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">216</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">191</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">218</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average zinc grade</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:-2.733px; font-family:Arial" align=right>3.61%</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:-1.8px; font-family:Arial" align=right>4.58%</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:-2.733px; font-family:Arial" align=right>3.91%</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; font-family:Arial" align=right>4.30%</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Silver - ounces</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">694,984</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">705,981</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,202,128</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,051,128</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Zinc - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,567</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,455</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">13,994</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">11,554</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Lead - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,591</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,724</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,514</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,228</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Copper - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">381</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">227</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,031</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">685</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total cash cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:5.667px; font-family:Arial" align=right>(5.14)</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1.99</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:5.667px; font-family:Arial" align=right>(3.58)</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>2.82</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total production cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:5.667px; font-family:Arial" align=right>(3.23)</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3.68</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:5.667px; font-family:Arial" align=right>(1.87)</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>4.54</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>In thousands of US dollars</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Direct operating costs, royalties, treatment and </P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">refining charges</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial" align=justify>14,311</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">8,582</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial" align=justify>39,309</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">24,207</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">By-product credits</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(17,507)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(7,322)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(46,359)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(19,000)</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Cash operating costs</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(3,196)</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,260</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(7,050)</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">5,207</P>
</TD></TR>
<TR><TD style="border-bottom:1.333px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Depreciation, amortization and reclamation</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,185</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,077</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">3,360</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">3,178</P>
</TD></TR>
<TR><TD style="border-bottom:2px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Production costs</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial" align=justify>(2,012)</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial" align=justify>2,337</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial" align=justify>(3,689)</P>
</TD><TD style="border-bottom:2px solid #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">8,385</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Payable ounces of silver (used in cost per ounce calculations)</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">622,402</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">634,104</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">1,970,474</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">1,847,927</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=662 colspan=9><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">(1) Production and cost figures are for Pan American&#146;s share only. &nbsp;Pan American&#146;s ownership was approximately <BR>
&nbsp;&nbsp;&nbsp;88.7% during the quarter.</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>La Colorada Mine</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Tonnes milled</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">60,463</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">56,746</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">174,257</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">156,209</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average silver grade - grams per tonne</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">547</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">510</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">546</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">537</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Silver - ounces</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">923,553</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">817,744</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,635,197</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,249,760</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Zinc - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Lead - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">68</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">74</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total cash cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.92</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.48</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.83</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.48</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total production cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>7.55</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>7.40</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>7.66</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>7.40</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>In thousands of US dollars</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Direct operating costs, royalties, treatment and </P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">refining charges</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">6,050</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,832</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">16,835</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">13,300</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">By-product credits</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(631)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(374)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(1,553)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(1,009)</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Cash operating costs</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">5,418</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,458</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">15,282</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">12,291</P>
</TD></TR>
<TR><TD style="border-bottom:1.333px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Depreciation, amortization and reclamation</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,499</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,561</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,805</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,308</P>
</TD></TR>
<TR><TD style="border-bottom:2px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Production costs</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">6,918</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">6,019</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">20,086</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2px solid #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">16,599</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Payable ounces of silver (used in cost per ounce calculations)</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">915,811</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">813,752</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,621,902</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:4.667px; font-family:Arial">2,242,188</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px">7</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; padding-right:-36px; font-family:Arial; font-size:16px; page-break-before:always" align=right>&nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=326></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>Three months ended</B></P>
</TD><TD width=168 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Nine months ended</B></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD><TD width=168 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>Silver Stock Piles</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=252 colspan=6><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Tonnes sold</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">13,506</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">15,076</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">42,763</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">46,488</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average silver grade - grams per tonne</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">279</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">327</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">324</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">327</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Silver - ounces</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">121,327</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">158,578</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">445,655</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">514,608</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total cash cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3.30</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1.72</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3.21</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1.76</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total production cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>&nbsp;3.30</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1.72</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="font-family: Arial; margin: 0px; padding-right: 10px" align="right">3.21</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>1.76</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>In thousands of US dollars</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Direct operating costs, royalties, treatment and </P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">refining charges</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial" align=justify>217</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:38px; font-family:Arial">152</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">796</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:38px; font-family:Arial">510</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">By-product credits</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Cash operating costs</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">217</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">152</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">796</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">510</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Depreciation, amortization and reclamation</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD style="border-bottom:2.667px double #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Production costs</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial" align=justify>217</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">152</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">796</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">510</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><A NAME="OLE_LINK2"></A><A NAME="OLE_LINK3"></A></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Payable ounces of silver (used in cost per ounce calculations)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">65,694</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">88,376</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">247,982</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">289,169</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>San Vicente Mine**</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Tonnes milled</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">6,725</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">15,712</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average silver grade - grams per tonne</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">317</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">319</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Average zinc grade &#150; percent</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3.32</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>3.70</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Silver - ounces</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">55,370</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">133,920</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Zinc - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">169</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">453</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Copper - tonnes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">11</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">26</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total cash cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>8.09</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>-</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>5.48</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Total production cost per ounce *</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>&nbsp;8.40</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>&nbsp;-</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="font-family: Arial; margin: 0px; padding-right: 10px" align="right">5.78</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; padding-right:10px; font-family:Arial" align=right>-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial"><B>In thousands of US dollars</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Direct operating costs, royalties, treatment and </P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">refining charges</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial" align=justify>963</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial" align=justify>-</P>
</TD><TD valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,800</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">By-product credits</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(564)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(1,146)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Cash operating costs</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">399</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">655</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Depreciation, amortization and reclamation</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">15</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">36</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD style="border-bottom:2.667px double #000000" valign=top width=326><P style="margin:0px; font-family:Arial">Production costs</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial" align=justify>414</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial" align=justify>-</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">690</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=326><P style="margin:0px; font-family:Arial">Payable ounces of silver (used in cost per ounce calculations)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">49,298</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">119,384</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">* See discussion below in Management discussion and analysis under, &#147;Cash and total production costs per ounce for payable silver&#148; for non-GAAP measures.</P>
<P style="margin:0px"><BR></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">** The production statistics represent Pan American&#146;s 55% interest in the mine in 2006.</P>
<P style="margin:0px"><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px">8</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; padding-right:-36px; font-family:Arial; font-size:16px; page-break-before:always" align=right>&nbsp;</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=399.4></TD><TD width=24.267></TD><TD width=101.733></TD><TD width=29.333></TD><TD width=89></TD></TR>
<TR><TD valign=top width=643.733 colspan=5><P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px" align=center><B>PAN AMERICAN SILVER CORP</B>.</P>
</TD></TR>
<TR><TD valign=top width=643.733 colspan=5><P style="margin:0px; font-family:Arial" align=center>Consolidated Balance Sheets</P>
</TD></TR>
<TR><TD valign=top width=643.733 colspan=5><P style="margin:0px; font-family:Arial" align=center>(In thousands of US dollars)</P>
</TD></TR>
<TR><TD valign=top width=643.733 colspan=5><P style="margin:0px; font-family:Arial" align=center>(Unaudited)</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=126 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>September 30, 2006</B></P>
</TD><TD width=118.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><B>December 31, 2005</B></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=643.733 colspan=5><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial"><B>Assets</B></P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=118.333 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Current</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=118.333 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Cash and cash equivalents</P>
</TD><TD width=24.267><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial">72,434</P>
</TD><TD width=29.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial">29,291</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Short-term investments</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial">108,702</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial">26,031</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Accounts receivable, net of $Nil provision for doubtful accounts</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial">41,216</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial">27,342</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Inventories (note 4)</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial">24,611</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial">16,667</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Unrealized gain on commodity and foreign currency contracts</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:22.333px; font-family:Arial">1,161</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:32.333px; font-family:Arial">863</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Prepaid expenses and other</P>
</TD><TD style="border-bottom:1px solid #000000" width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=101.733><P style="margin:0px; text-indent:22.333px; font-family:Arial">2,993</P>
</TD><TD style="border-bottom:1px solid #000000" width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=89><P style="margin:0px; text-indent:22.333px; font-family:Arial">1,935</P>
</TD></TR>
<TR><TD width=399.4><P style="margin:0px; font-family:Arial">Total Current Assets</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial">251,117</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:9px; font-family:Arial">102,129</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="font-size:2pt">&nbsp;</P></TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px"><BR></P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Mineral property, plant and equipment, net (note 6)</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial">113,071</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial">99,815</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Construction in progress (note 7)</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial">78,721</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial">34,306</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Investment in non-producing properties (note 7)</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial">183,460</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:9px; font-family:Arial">123,259</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Direct smelting ore (note 4)</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:22.333px; font-family:Arial">1,937</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:22.333px; font-family:Arial">2,236</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=399.4><P style="margin:0px; font-family:Arial">Other assets</P>
</TD><TD style="border-bottom:1px solid #000000" width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=101.733><P style="margin:0px; text-indent:22.333px; font-family:Arial">2,461</P>
</TD><TD style="border-bottom:1px solid #000000" width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=89><P style="margin:0px; text-indent:32.333px; font-family:Arial">535</P>
</TD></TR>
<TR><TD style="border-bottom:2.667px double #000000" width=399.4><P style="margin:0px; font-family:Arial"><B>Total Assets</B></P>
</TD><TD style="border-bottom:2.667px double #000000" width=24.267><P style="margin:0px; font-family:Arial" align=right><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial"><B>630,767</B></P>
</TD><TD style="border-bottom:2.667px double #000000" width=29.333><P style="margin:0px; font-family:Arial" align=right><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" width=89><P style="margin:0px; text-indent:9px; font-family:Arial"><B>362,280</B></P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="font-size:2pt">&nbsp;</P></TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px" align=justify><BR></P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px" align=justify><BR></P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial"><B>Liabilities</B></P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px" align=justify><BR></P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px" align=justify><BR></P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Current</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px" align=justify><BR></P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px" align=justify><BR></P>
</TD></TR>
<TR><TD width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Accounts payable and accrued liabilities</P>
</TD><TD width=24.267><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial">31,890</P>
</TD><TD width=29.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial">21,886</P>
</TD></TR>
<TR><TD width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Unrealized loss on commodity contracts</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:22.333px; font-family:Arial">5,115</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:22.333px; font-family:Arial">4,810</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Taxes payable</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>16,289</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:32.333px; font-family:Arial" align=justify>447</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Current portion of non-current liabilities</P>
</TD><TD style="border-bottom:1px solid #000000" width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=101.733><P style="margin:0px; text-indent:22.333px; font-family:Arial" align=justify>1,817</P>
</TD><TD style="border-bottom:1px solid #000000" width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=89><P style="margin:0px; text-indent:32.333px; font-family:Arial" align=justify>223</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Total Current Liabilities</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>55,111</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>27,366</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="font-size:2pt">&nbsp;</P></TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px" align=justify><BR></P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px" align=justify><BR></P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Liability component of convertible debentures</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:39px; font-family:Arial" align=justify>91</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:32.333px; font-family:Arial" align=justify>126</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Provision for asset retirement obligations and reclamation (note 8)</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>42,140</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>39,378</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Provision for future income taxes</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>45,024</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>32,396</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Other liabilities and provisions</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:39px; font-family:Arial" align=justify>20</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:22.333px; font-family:Arial" align=justify>1,894</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=399.4><P style="margin:0px; font-family:Arial">Non-controlling interest</P>
</TD><TD style="border-bottom:1px solid #000000" width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=101.733><P style="margin:0px; text-indent:22.333px; font-family:Arial" align=justify>7,874</P>
</TD><TD style="border-bottom:1px solid #000000" width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=89><P style="margin:0px; text-indent:22.333px; font-family:Arial" align=justify>3,798</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=399.4><P style="margin:0px; font-family:Arial"><B>Total Liabilities</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial"><B>150,260</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=89><P style="margin:0px; text-indent:9px; font-family:Arial"><B>104,958</B></P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="font-size:2pt">&nbsp;</P></TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial"><B>Shareholders&#146; Equity</B></P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; font-family:Arial">Share capital (note 9)</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Authorized:</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:24px; font-family:Arial">200,000,000 common shares of no par value</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:12px; font-family:Arial">Issued:</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:24px; font-family:Arial">December 31, 2005 &nbsp;- 67,564,903 common shares</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="font-size:2pt">&nbsp;</P></TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:24px; font-family:Arial">September 30, 2006 &#150; &nbsp;&nbsp;&nbsp;76,066,532 &nbsp;&nbsp;common shares</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial" align=justify>583,091</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:9px; font-family:Arial" align=justify>388,830</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:24px; font-family:Arial">Equity component of convertible debentures</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:32.333px; font-family:Arial" align=justify>710</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:32.333px; font-family:Arial" align=justify>762</P>
</TD></TR>
<TR><TD valign=top width=399.4><P style="margin:0px; text-indent:24px; font-family:Arial">Additional paid in capital</P>
</TD><TD width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD width=101.733><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>13,566</P>
</TD><TD width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD width=89><P style="margin:0px; text-indent:15.667px; font-family:Arial" align=justify>13,117</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=399.4><P style="margin:0px; text-indent:24px; font-family:Arial">Deficit</P>
</TD><TD style="border-bottom:1px solid #000000" width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=101.733><P style="margin:0px; text-indent:0.067px; font-family:Arial" align=justify>(116,860)</P>
</TD><TD style="border-bottom:1px solid #000000" width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=89><P style="margin:0px; text-indent:0.067px; font-family:Arial" align=justify>(145,387)</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=399.4><P style="margin:0px; font-family:Arial"><B>Total Shareholders&#146; Equity</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=24.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial" align=justify><B>480,507</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=29.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=89><P style="margin:0px; text-indent:9px; font-family:Arial" align=justify><B>257,322</B></P>
</TD></TR>
<TR><TD style="border-bottom:2.667px double #000000" width=399.4><P style="margin:0px; font-family:Arial"><B>Total Liabilities and Shareholders&#146; Equity</B></P>
</TD><TD style="border-bottom:2.667px double #000000" width=24.267><P style="margin:0px; font-family:Arial" align=right><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" width=101.733><P style="margin:0px; text-indent:9px; font-family:Arial" align=justify><B>630,767</B></P>
</TD><TD style="border-bottom:2.667px double #000000" width=29.333><P style="margin:0px; font-family:Arial" align=right><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" width=89><P style="margin:0px; text-indent:9px; font-family:Arial" align=justify><B>362,280</B></P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=643.667></TD></TR>
<TR><TD valign=top width=643.667><P style="margin:0px; font-family:Arial" align=right>See accompanying notes to consolidated financial statements</P>
</TD></TR>
</TABLE>
<A NAME="OLE_LINK4"></A><A NAME="OLE_LINK5"></A><P style="margin:0px"><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px">9</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px" align=center><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial" align=center>Consolidated Statements of Operations</P>
<P style="margin:0px; font-family:Arial" align=center>(Unaudited - in thousands of US Dollars, except for per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=297.933></TD><TD width=11.6></TD><TD width=79.2></TD><TD width=11.667></TD><TD width=79.267></TD><TD width=11.667></TD><TD width=79.267></TD><TD width=11.667></TD><TD width=79.267></TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=181.733 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Three months ended</B></P>
</TD><TD valign=bottom width=181.867 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Nine months ended</B></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=181.733 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>September 30,</B></P>
</TD><TD valign=bottom width=181.867 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>September 30,</B></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=90.8 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=90.933 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=90.933 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=90.933 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="line-height:24px; margin:0px; font-family:Arial">Sales</P>
</TD><TD valign=bottom width=11.6><P style="margin-top:6.667px; margin-bottom:0px; font-family:Arial">$</P>
</TD><TD valign=bottom width=79.2><P style="margin-top:6.667px; margin-bottom:0px; text-indent:31.067px; font-family:Arial">64,268</P>
</TD><TD valign=bottom width=11.667><P style="margin-top:6.667px; margin-bottom:0px; font-family:Arial">$</P>
</TD><TD valign=bottom width=79.267><P style="margin-top:6.667px; margin-bottom:0px; text-indent:31.067px; font-family:Arial">30,086</P>
</TD><TD valign=bottom width=11.667><P style="margin-top:6.667px; margin-bottom:0px; font-family:Arial">$</P>
</TD><TD valign=bottom width=79.267><P style="margin-top:6.667px; margin-bottom:0px; text-indent:19.667px; font-family:Arial" align=justify>172,859</P>
</TD><TD valign=bottom width=11.667><P style="margin-top:6.667px; margin-bottom:0px; font-family:Arial">$</P>
</TD><TD valign=bottom width=79.267><P style="margin-top:6.667px; margin-bottom:0px; text-indent:26.333px; font-family:Arial">84,530</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Cost of sales</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial">30,813</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:31.067px; font-family:Arial">21,337</P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial" align=justify>82,723</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial">62,134</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Depreciation and amortization</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=79.2><P style="margin:0px; text-indent:37.733px; font-family:Arial">4,234</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=79.267><P style="margin:0px; text-indent:37.733px; font-family:Arial">3,788</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=11.667>&nbsp;</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial" align=justify>11,880</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial">9,421</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial"><B>Mine operating earnings</B></P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial"><B>29,221</B></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:37.733px; font-family:Arial"><B>4,961</B></P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial" align=justify><B>78,256</B></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial"><B>12,975</B></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px" align=justify><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px" align=justify><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">General and administrative, including stock-based</P>
<P style="margin:0px; font-family:Arial">&nbsp;&nbsp;&nbsp;compensation</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD width=79.2><P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:37.733px; font-family:Arial">2,739</P>
</TD><TD width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:37.733px; font-family:Arial">2,065</P>
</TD><TD width=11.667></TD><TD width=79.267><P style="margin:0px" align=justify><BR></P>
<P style="margin:0px; text-indent:33px; font-family:Arial" align=justify>7,088</P>
</TD><TD width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial">5,378</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Exploration and project development</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD width=79.2><P style="margin:0px; text-indent:37.733px; font-family:Arial">2,267</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:47.733px; font-family:Arial">394</P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial" align=justify>4,138</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial">2,703</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Asset retirement and reclamation</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:47.733px; font-family:Arial">615</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:47.733px; font-family:Arial">735</P>
</TD><TD valign=bottom width=11.667>&nbsp;</TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial" align=justify>1,843</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial">1,674</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Operating income</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial">23,600</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=top width=79.267><P style="margin:0px; text-indent:37.733px; font-family:Arial">1,767</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=11.667>&nbsp;</TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial" align=justify>65,187</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial" align=justify>3,220</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Interest and financing expenses</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:45.467px; font-family:Arial">(87)</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:38.8px; font-family:Arial">(126)</P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:34.067px; font-family:Arial" align=justify>(436)</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:34.067px; font-family:Arial" align=justify>(312)</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Investment and other income</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:37.733px; font-family:Arial">1,956</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:37.733px; font-family:Arial">1,190</P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial" align=justify>3,296</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial" align=justify>2,438</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Loss on commodity and foreign currency</P>
<P style="margin:0px; font-family:Arial">&nbsp;&nbsp;&nbsp;contract</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:38.8px; font-family:Arial">(676)</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:28.8px; font-family:Arial">(2,198)</P>
</TD><TD valign=bottom width=11.667>&nbsp;&nbsp;</TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:17.4px; font-family:Arial" align=justify>(17,286)</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:24.067px; font-family:Arial" align=justify>(2,044)</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000" width=297.933><P style="margin:0px; font-family:Arial">Income before taxes and non-controlling interest</P>
</TD><TD style="border-top:1px solid #000000" width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000" width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial">24,793</P>
</TD><TD style="border-top:1px solid #000000" width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000" valign=top width=79.267><P style="margin:0px; text-indent:47.733px; font-family:Arial">633</P>
</TD><TD style="border-top:1px solid #000000" width=11.667></TD><TD style="border-top:1px solid #000000" width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial" align=justify>50,761</P>
</TD><TD style="border-top:1px solid #000000" width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:33px; font-family:Arial">3,302</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Income tax (provision) benefit</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:28.8px; font-family:Arial">(8,398)</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:54.4px; font-family:Arial">79</P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:17.4px; font-family:Arial" align=justify>(19,988)</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:24.067px; font-family:Arial">(1,609)</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Non-controlling interest</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=79.2><P style="margin:0px; text-indent:45.467px; font-family:Arial">(40)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=79.267><P style="margin:0px; text-indent:38.8px; font-family:Arial">(540)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=11.667>&nbsp;</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:24.067px; font-family:Arial">(2,215)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:34.067px; font-family:Arial">(773)</P>
</TD></TR>
<TR><TD style="border-bottom:2.667px double #000000" valign=bottom width=297.933><P style="margin:0px; font-family:Arial"><B>Net income for the period</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=11.6><P style="margin:0px; font-family:Arial"><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial"><B>16,355</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=11.667><P style="margin:0px; font-family:Arial"><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=79.267><P style="margin:0px; text-indent:47.733px; font-family:Arial"><B>172</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=11.667><P style="margin:0px; font-family:Arial" align=center><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial"><B>28,558</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=11.667><P style="margin:0px; font-family:Arial" align=center><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=79.267><P style="margin:0px; text-indent:43px; font-family:Arial"><B>920</B></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667>
</TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Attributable to common shareholders:</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Net income for the period</P>
</TD><TD valign=top width=11.6><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=top width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial">16,355</P>
</TD><TD valign=top width=11.667><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=top width=79.267><P style="margin:0px; text-indent:47.733px; font-family:Arial">172</P>
</TD><TD valign=bottom width=11.667><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial">28,558</P>
</TD><TD valign=bottom width=11.667><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:43px; font-family:Arial">920</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Accretion of convertible debentures</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:52.133px; font-family:Arial">(5)</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:63.267px; font-family:Arial">-</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:40.733px; font-family:Arial">(31)</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:47.4px; font-family:Arial">(3)</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" valign=top width=297.933><P style="margin:0px; text-indent:-315.8px; font-family:Arial">Adjusted net income for the period attributable to common shareholders</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" valign=top width=11.6><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial">16,350</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" width=11.667><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" width=79.267><P style="margin:0px; text-indent:47.733px; font-family:Arial">172</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" width=11.667><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial">28,527</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" width=11.667><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2px solid #000000" width=79.267><P style="margin:0px; text-indent:43px; font-family:Arial">917</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Basic income per share </P>
</TD><TD valign=top width=11.6><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=top width=79.2><P style="margin:0px; padding-right:8.8px; font-family:Arial" align=right>0.22</P>
</TD><TD valign=top width=11.667><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=top width=79.267><P style="margin:0px; text-indent:49.067px; font-family:Arial">0.00</P>
</TD><TD valign=bottom width=11.667><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=79.267><P style="margin:0px; padding-right:12.6px; font-family:Arial" align=right>0.39</P>
</TD><TD valign=bottom width=11.667><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=79.267><P style="margin:0px; padding-right:12.667px; font-family:Arial" align=right>0.01</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Diluted income per share</P>
</TD><TD valign=top width=11.6><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=top width=79.2><P style="margin:0px; padding-right:8.8px; font-family:Arial" align=right>0.20</P>
</TD><TD valign=top width=11.667><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=top width=79.267><P style="margin:0px; text-indent:49.067px; font-family:Arial">0.00</P>
</TD><TD valign=bottom width=11.667><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=79.267><P style="margin:0px; padding-right:12.6px; font-family:Arial" align=right>0.37</P>
</TD><TD valign=bottom width=11.667><P style="margin:0px; font-family:Arial" align=center>$</P>
</TD><TD valign=bottom width=79.267><P style="margin:0px; padding-right:12.667px; font-family:Arial" align=right>0.01</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">Weighted average number of shares outstanding (000&#146;s)</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px"><BR></P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=90.933 colspan=2><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Basic</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial">76,007</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:31.067px; font-family:Arial">66,974</P>
</TD><TD valign=bottom width=90.933 colspan=2><P style="margin:0px; text-indent:38.133px; font-family:Arial">72,790</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:27.333px; font-family:Arial">66,943</P>
</TD></TR>
<TR><TD valign=bottom width=297.933><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Diluted</P>
</TD><TD valign=top width=11.6><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.2><P style="margin:0px; text-indent:31.067px; font-family:Arial">80,687</P>
</TD><TD valign=top width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=79.267><P style="margin:0px; text-indent:31.067px; font-family:Arial">71,553</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:27.667px; font-family:Arial">77,469</P>
</TD><TD valign=bottom width=11.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=79.267><P style="margin:0px; text-indent:26.333px; font-family:Arial">71,882</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=660></TD></TR>
<TR><TD width=660><P style="margin:0px; font-family:Arial" align=right>See accompanying notes to consolidated financial statements</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<A NAME="OLE_LINK1"></A><P style="margin:0px" align=center><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">10</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px" align=center><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial" align=center>Consolidated Statement of Cash Flows</P>
<P style="margin:0px; font-family:Arial" align=center>(Unaudited &#150; in thousands of US dollars)</P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=2></TD><TD width=324></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD><TD width=12></TD><TD width=72></TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>Three months ended</B></P>
</TD><TD width=168 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>Nine months ended</B></P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=156 colspan=3><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD><TD width=168 colspan=4><P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2006</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=84 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>2005</B></P>
</TD></TR>
<TR><TD valign=bottom width=326 colspan=2><P style="margin-top:6.667px; margin-bottom:0px; font-family:Arial"><B>Operating activities</B></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">Net loss income for the period</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">16,355</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:38px; font-family:Arial">172</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">28,558</P>
</TD><TD valign=bottom width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD valign=bottom width=72><P style="margin:0px; text-indent:38px; font-family:Arial">920</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">Reclamation expenditures</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(301)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(324)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(668)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(824)</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">Items not involving cash:</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;Depreciation and amortization</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">4,234</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">3,788</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">11,880</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">9,421</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;Accretion of asset retirement obligation</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">615</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">735</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,843</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,674</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;Loss (gain) on disposition of assets</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">944</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(453)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">760</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(453)</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;Future income taxes</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,043</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(1,313)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">460</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(1,618)</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;Non-controlling interest</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">39</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">540</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,215</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">773</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;Unrealized (loss) gain on commodity and foreign<BR>
 currency contracts</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:19.067px; font-family:Arial">(3,217)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,259</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:51.333px; font-family:Arial">6</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(2,080)</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;Stock-based compensation</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">378</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">345</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,600</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,347</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">Changes in non-cash operating working capital items (Note 10)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=72><P style="margin:0px"><BR></P>
<P style="margin:0px; text-indent:19.067px; font-family:Arial">(5,325)</P>
</TD><TD style="border-bottom:1px solid #000000" width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(522)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72><P style="margin:0px; text-indent:28px; font-family:Arial">5,855</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(697)</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=326 colspan=2><P style="margin:0px; font-family:Arial"><B>Cash generated by operations</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial"><B>15,765</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial"><B>4,227</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial"><B>52,509</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial"><B>8,463</B></P>
</TD></TR>
<TR><TD valign=bottom width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial"><B>Investing activities</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Mineral property, plant and equipment expenditures</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(18,026)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(16,482)</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(71,272)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(40,731)</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Maturity (purchase) of short-term investments </P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">13,714</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">9,630</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial">(82,671)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">23,428</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Other</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(585)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">547</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(752)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">949</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=326 colspan=2><P style="margin:0px; font-family:Arial"><B>Cash used in investing activities</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial"><B>(4,897)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial"><B>(6,305)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=72><P style="margin:0px; text-indent:5.733px; font-family:Arial"><B>(154,695)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=72><P style="margin:0px; text-indent:12.4px; font-family:Arial"><B>(16,354)</B></P>
</TD></TR>
<TR><TD valign=bottom width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial"><B>Financing activities</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Shares issued for cash</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">698</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,539</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial">153,033</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">2,740</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Share issue costs</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:38px; font-family:Arial">181</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(7,664)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Interest paid on convertible debentures</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:35.733px; font-family:Arial">(22)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:35.733px; font-family:Arial">(41)</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">&nbsp;&nbsp;Repayment of short-term loan</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(2,202)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(408)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:53.533px; font-family:Arial">-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(693)</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=326 colspan=2><P style="margin:0px; font-family:Arial"><B>Cash (used in) generated by financing activities</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial"><B>(1,354)</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial"><B>1,131</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=72><P style="margin:0px; text-indent:14.667px; font-family:Arial"><B>145,328</B></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=72><P style="margin:0px; text-indent:28px; font-family:Arial"><B>2,047</B></P>
</TD></TR>
<TR><TD valign=bottom width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">Increase/(decrease) in cash and cash equivalents during the period</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=72><P style="margin:0px; text-indent:28px; font-family:Arial">9,514</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:29.067px; font-family:Arial">(947)</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">43,142</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px; text-indent:19.067px; font-family:Arial">(5,844)</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=326 colspan=2><P style="margin:0px; font-family:Arial">Cash and cash equivalents, beginning of period</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">62,919</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">23,448</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial">29,291</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="margin:0px; text-indent:22.733px; font-family:Arial">28,345</P>
</TD></TR>
<TR><TD style="border-bottom:2.667px double #000000" width=326 colspan=2><P style="margin:0px; font-family:Arial"><B>Cash and cash equivalents, end of period</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial"><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial"><B>72,433</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial"><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial"><B>22,501</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial"><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial"><B>72,433</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=12><P style="margin:0px; font-family:Arial"><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=72><P style="margin:0px; text-indent:21.333px; font-family:Arial"><B>22,501</B></P>
</TD></TR>
<TR><TD valign=bottom width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD valign=bottom width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD width=326 colspan=2><P style="margin:0px; font-family:Arial"><B>Supplemental Disclosures</B></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD width=326 colspan=2><P style="margin:0px; font-family:Arial">Interest paid</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">16</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:44.667px; font-family:Arial">18</P>
</TD><TD style="border-bottom:2.667px double #000000" width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=72><P style="margin:0px; text-indent:47.733px; font-family:Arial">35</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; padding-right:-12px; font-family:Arial">$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=72><P style="margin:0px; text-indent:47.733px; font-family:Arial">36</P>
</TD></TR>
<TR><TD width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD><TD valign=bottom width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD width=326 colspan=2><P style="margin:0px; font-family:Arial">Taxes paid</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,505</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="margin:0px; text-indent:28px; font-family:Arial">1,001</P>
</TD><TD style="border-bottom:2.667px double #000000" width=12><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=72><P style="margin:0px; text-indent:31.067px; font-family:Arial">5,254</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="margin:0px; padding-right:-12px; font-family:Arial">$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=72><P style="margin:0px; text-indent:31.067px; font-family:Arial">4,112</P>
</TD></TR>
<TR><TD valign=bottom width=326 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72><P style="margin:0px"><BR></P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=72><P style="margin:0px"><BR></P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=72><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD style="border-top:2.667px double #000000" width=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=660 colspan=9><P style="margin:0px; padding-right:-7.2px; font-family:Arial" align=right>See accompanying notes to consolidated financial statements</P>
</TD></TR>
</TABLE>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">11</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px" align=center><B>PAN AMERICAN SILVER CORP.</B></P>
<P style="margin:0px; font-family:Arial" align=center>Consolidated Statements of Shareholders&#146; Equity <BR>
(in thousands of US dollars, except for amounts of shares)</P>
<P style="margin:0px" align=center><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=228.333></TD><TD width=60.067></TD><TD width=2.067></TD><TD width=12></TD><TD width=45.867></TD><TD width=24.067></TD><TD width=54.933></TD><TD width=15.8></TD><TD width=65.267></TD><TD width=13.467></TD><TD width=60.4></TD><TD width=14.467></TD><TD width=63.667></TD></TR>
<TR><TD width=228.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=120 colspan=4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Common Shares</P>
</TD><TD width=79 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Convertible</P>
</TD><TD width=81.067 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Additional</P>
</TD><TD width=73.867 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=78.133 colspan=2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=228.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=60.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Shares</P>
</TD><TD style="border-bottom:1px solid #000000" width=59.933 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Amount</P>
</TD><TD style="border-bottom:1px solid #000000" width=79 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Debentures</P>
</TD><TD style="border-bottom:1px solid #000000" width=81.067 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Paid in Capital</P>
</TD><TD style="border-bottom:1px solid #000000" width=73.867 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Deficit</P>
</TD><TD style="border-bottom:1px solid #000000" width=78.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Total</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Balance, December 31, 2004</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>66,835,378</P>
</TD><TD width=12><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>380,571</P>
</TD><TD width=24.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=54.933><P style="line-height:14.667px; margin:0px; text-indent:17.6px; font-family:Arial; font-size:12px">633</P>
</TD><TD width=15.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:15.867px; font-family:Arial; font-size:12px">10,976</P>
</TD><TD width=13.467><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=60.4><P style="line-height:14.667px; margin:0px; text-indent:7.133px; font-family:Arial; font-size:12px">(116,664)</P>
</TD><TD width=14.467><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:12.267px; font-family:Arial; font-size:12px">275,516</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Issued on the exercise of stock options</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>300,325</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>2,780</P>
</TD><TD valign=top width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:28.867px; font-family:Arial; font-size:12px">(51)</P>
</TD><TD valign=top width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:24.267px; font-family:Arial; font-size:12px">2,729</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Issued on the exercise of share purchase warrants</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>1,186</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>11</P>
</TD><TD valign=top width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:39.267px; font-family:Arial; font-size:12px">11</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Stock-based compensation on options granted</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD valign=top width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:30.867px; font-family:Arial; font-size:12px">937</P>
</TD><TD valign=top width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:33.267px; font-family:Arial; font-size:12px">937</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Issued warrants to settle obligation</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD valign=top width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:21.867px; font-family:Arial; font-size:12px">2,100</P>
</TD><TD valign=top width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:24.267px; font-family:Arial; font-size:12px">2,100</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Accretion of convertible debentures</P>
</TD><TD valign=top width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD valign=top width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; text-indent:29.6px; font-family:Arial; font-size:12px">3</P>
</TD><TD valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD valign=top width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; text-indent:40.133px; font-family:Arial; font-size:12px">(3)</P>
</TD><TD valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Issued as compensation</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>29,484</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>410</P>
</TD><TD valign=top width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD valign=top width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:33.267px; font-family:Arial; font-size:12px">410</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Other</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:22.867px; font-family:Arial; font-size:12px">(172)</P>
</TD><TD valign=top width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:25.267px; font-family:Arial; font-size:12px">(172)</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Net loss for the year </P>
</TD><TD style="border-bottom:1px solid #000000" width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=60.4><P style="line-height:14.667px; margin:0px; text-indent:36.133px; font-family:Arial; font-size:12px">920</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=63.667><P style="line-height:14.667px; margin:0px; text-indent:33.267px; font-family:Arial; font-size:12px">920</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Balance, September 30, 2005</P>
</TD><TD style="border-bottom:1px solid #000000" width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>67,166,373</P>
</TD><TD style="border-bottom:1px solid #000000" width=12><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>383,772</P>
</TD><TD style="border-bottom:1px solid #000000" width=24.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" width=54.933><P style="line-height:14.667px; margin:0px; text-indent:17.6px; font-family:Arial; font-size:12px">636</P>
</TD><TD style="border-bottom:1px solid #000000" width=15.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" width=65.267><P style="line-height:14.667px; margin:0px; text-indent:15.867px; font-family:Arial; font-size:12px">13,790</P>
</TD><TD style="border-bottom:1px solid #000000" width=13.467><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" width=60.4><P style="line-height:14.667px; margin:0px; text-indent:7.133px; font-family:Arial; font-size:12px">(115,747)</P>
</TD><TD style="border-bottom:1px solid #000000" width=14.467><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" width=63.667><P style="line-height:14.667px; margin:0px; text-indent:12.267px; font-family:Arial; font-size:12px">282,451</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=228.333><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=62.133 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=45.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=54.933><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=65.267><P style="margin:0px"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=60.4><P style="margin:0px"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=63.667><P style="margin:0px"><BR></P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Balance, December 31, 2005</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>67,564,903</P>
</TD><TD width=12><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>388,830</P>
</TD><TD width=24.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=54.933><P style="line-height:14.667px; margin:0px; text-indent:17.6px; font-family:Arial; font-size:12px">762</P>
</TD><TD width=15.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:15.867px; font-family:Arial; font-size:12px">13,117</P>
</TD><TD width=13.467><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=60.4><P style="line-height:14.667px; margin:0px; text-indent:7.133px; font-family:Arial; font-size:12px">(145,387)</P>
</TD><TD width=14.467><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:12.267px; font-family:Arial; font-size:12px">257,322</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Issued on the exercise of stock options</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>224,308</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>3,733</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:22.867px; font-family:Arial; font-size:12px">(934)</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:24.267px; font-family:Arial; font-size:12px">2,799</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Issued on the exercise of share &nbsp;&nbsp;&nbsp;purchase warrants</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>12,372</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>163</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:28.867px; font-family:Arial; font-size:12px">(29)</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:33.267px; font-family:Arial; font-size:12px">134</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Issued on the conversion of debentures</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>7,311</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>93</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; text-indent:15.6px; font-family:Arial; font-size:12px">(83)</P>
</TD><TD width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:39.267px; font-family:Arial; font-size:12px">10</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Issued as compensation</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>26,231</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>559</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:36.867px; font-family:Arial; font-size:12px">70</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:33.267px; font-family:Arial; font-size:12px">629</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Shares issued to acquire mineral interests</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>1,950,000</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>47,381</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:18.267px; font-family:Arial; font-size:12px">47,381</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Stock issued for cash</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>6,281,407</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>142,332</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; text-indent:12.267px; font-family:Arial; font-size:12px">142,332</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Accretion of convertible debentures</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; text-indent:23.6px; font-family:Arial; font-size:12px">31</P>
</TD><TD width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; text-indent:33.933px; font-family:Arial; font-size:12px">(31)</P>
</TD><TD width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; padding-right:-0.4px; font-family:Arial; font-size:12px" align=center>-</P>
</TD></TR>
<TR><TD width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Stock-based compensation on options granted</P>
</TD><TD width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=12><P style="font-size:2pt">&nbsp;</P></TD><TD width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=54.933><P style="line-height:14.667px; margin:0px; text-indent:44.333px; font-family:Arial; font-size:12px">-</P>
</TD><TD width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD width=65.267><P style="line-height:14.667px; margin:0px; text-indent:21.867px; font-family:Arial; font-size:12px">1,342</P>
</TD><TD width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=60.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD width=63.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>1,342</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Net income for the period</P>
</TD><TD style="border-bottom:1px solid #000000" width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD style="border-bottom:1px solid #000000" width=12><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD style="border-bottom:1px solid #000000" width=24.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=54.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>-</P>
</TD><TD style="border-bottom:1px solid #000000" width=15.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=65.267><P style="line-height:14.667px; margin:0px; text-indent:44.867px; font-family:Arial; font-size:12px">-</P>
</TD><TD style="border-bottom:1px solid #000000" width=13.467><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=60.4><P style="line-height:14.667px; margin:0px; text-indent:21.133px; font-family:Arial; font-size:12px">28,558</P>
</TD><TD style="border-bottom:1px solid #000000" width=14.467><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=63.667><P style="line-height:14.667px; margin:0px; text-indent:18.267px; font-family:Arial; font-size:12px">28,558</P>
</TD></TR>
<TR><TD style="border-bottom:2.667px double #000000" width=228.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Balance, September 30, 2006</P>
</TD><TD style="border-bottom:2.667px double #000000" width=62.133 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>76,066,532</P>
</TD><TD style="border-bottom:2.667px double #000000" width=12><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=45.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>583,091</P>
</TD><TD style="border-bottom:2.667px double #000000" width=24.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=54.933><P style="line-height:14.667px; margin:0px; text-indent:17.6px; font-family:Arial; font-size:12px">710</P>
</TD><TD style="border-bottom:2.667px double #000000" width=15.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=65.267><P style="line-height:14.667px; margin:0px; text-indent:15.867px; font-family:Arial; font-size:12px">13,566</P>
</TD><TD style="border-bottom:2.667px double #000000" width=13.467><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=60.4><P style="line-height:14.667px; margin:0px; text-indent:7.133px; font-family:Arial; font-size:12px">(116,860)</P>
</TD><TD style="border-bottom:2.667px double #000000" width=14.467><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" width=63.667><P style="line-height:14.667px; margin:0px; text-indent:12.267px; font-family:Arial; font-size:12px">480,507</P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin:13.333px"><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">12</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="font-family: Arial; margin-top: 13.333px; margin-bottom: -16px"><B>1.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:37.8px; text-indent:10.2px; font-family:Arial"><B>Nature of Operations</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>Pan American Silver Corp, subsidiary companies and joint ventures (collectively, the &#147;Company&#148; or &#147;Pan American&#148;) are engaged in silver mining and related activities, including exploration, extraction, processing, refining and reclamation. &nbsp;The Company&#146;s primary product (silver) is produced in Peru, Mexico and Bolivia, along with development activities in Argentina, Mexico and Bolivia, and exploration activities in South America.</P>
<P style="font-family: Arial; margin-top: 13.333px; margin-bottom: -16px"><B>2.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:37.8px; text-indent:10.2px; font-family:Arial"><B>Summary of Significant Accounting Policies</B></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:75.6px; text-indent:-37.8px; font-family:Arial" align=justify><U>a)</U></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:75.6px; font-family:Arial" align=justify><U>Basis of Presentation:</U> The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada for interim financial information and follow the same accounting policies and methods as our most recent annual financial statements. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in Canada for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three-month and nine month periods ended September 30, 2006 and 2005 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006. </P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:35.933px; text-indent:1.867px; font-family:Arial" align=justify>The consolidated balance sheet at December 31, 2005 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in Canada for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in the Pan American Silver Corp. (the &#147;Company&#148;) Annual Report for the year ended December 31, 2005. </P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:75.6px; text-indent:-37.8px; font-family:Arial" align=justify><U>b)</U></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:75.6px; font-family:Arial" align=justify><U>Principles of Consolidation:</U> The consolidated financial statements include the wholly-owned and partially-owned subsidiaries of the Company and joint ventures, the most significant of which are presented in the following table:</P>
<P style="margin:0px" align=justify><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=196.267></TD><TD width=72.8></TD><TD width=70></TD><TD width=87.667></TD><TD width=165.2></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=196.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Subsidiary</P>
</TD><TD style="border-bottom:1px solid #000000" width=72.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Location</P>
</TD><TD style="border-bottom:1px solid #000000" width=70><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Ownership interest</P>
</TD><TD style="border-bottom:1px solid #000000" width=87.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Status</P>
</TD><TD style="border-bottom:1px solid #000000" width=165.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Operations and Development Projects</P>
</TD></TR>
<TR><TD valign=top width=196.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72.8><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=70><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=87.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=165.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
<TR><TD valign=top width=196.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Pan American Silver S.A.C.</P>
</TD><TD valign=top width=72.8><P style="line-height:14.667px; margin:0px; padding-left:12.533px; font-family:Arial; font-size:12px">Peru</P>
</TD><TD valign=top width=70><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>&nbsp;100%</P>
</TD><TD valign=top width=87.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Consolidated</P>
</TD><TD valign=top width=165.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Quiruvilca and Huaron Mines</P>
</TD></TR>
<TR><TD valign=top width=196.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Compa&#241;&#237;a Minera Argentum S.A.</P>
</TD><TD valign=top width=72.8><P style="line-height:14.667px; margin:0px; padding-left:12.533px; font-family:Arial; font-size:12px">Peru</P>
</TD><TD valign=top width=70><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>&nbsp;88.5%</P>
</TD><TD valign=top width=87.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Consolidated</P>
</TD><TD valign=top width=165.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Morococha Mine</P>
</TD></TR>
<TR><TD valign=top width=196.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Plata Panamericana S.A. de C.V.</P>
</TD><TD valign=top width=72.8><P style="line-height:14.667px; margin:0px; padding-left:12.533px; font-family:Arial; font-size:12px">Mexico</P>
</TD><TD valign=top width=70><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>&nbsp;100%</P>
</TD><TD valign=top width=87.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Consolidated</P>
</TD><TD valign=top width=165.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>La Colorada Mine</P>
</TD></TR>
<TR><TD valign=top width=196.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Minera Corner Bay S.A.</P>
</TD><TD valign=top width=72.8><P style="line-height:14.667px; margin:0px; padding-left:12.533px; font-family:Arial; font-size:12px">Mexico</P>
</TD><TD valign=top width=70><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>&nbsp;100%</P>
</TD><TD valign=top width=87.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Consolidated</P>
</TD><TD valign=top width=165.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Alamo Dorado Project</P>
</TD></TR>
<TR><TD valign=top width=196.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Compa&#241;&#237;a Minera PAS Bolivia S.A.</P>
</TD><TD valign=top width=72.8><P style="line-height:14.667px; margin:0px; padding-left:12.533px; font-family:Arial; font-size:12px">Bolivia</P>
</TD><TD valign=top width=70><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>&nbsp;55%</P>
</TD><TD valign=top width=87.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Consolidated</P>
</TD><TD valign=top width=165.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>San Vicente Project</P>
</TD></TR>
<TR><TD valign=top width=196.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Compa&#241;&#237;a Minera Triton S.A.</P>
</TD><TD valign=top width=72.8><P style="line-height:14.667px; margin:0px; padding-left:12.533px; font-family:Arial; font-size:12px">Argentina</P>
</TD><TD valign=top width=70><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>&nbsp;100% <SUP>(1)</SUP></P>
</TD><TD valign=top width=87.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Consolidated</P>
</TD><TD valign=top width=165.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=justify>Manantial Espejo Project</P>
</TD></TR>
<TR><TD valign=top width=196.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=72.8><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=70><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=87.667><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=165.2><P style="font-size:2pt">&nbsp;</P></TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:13.333px; margin-top:0px; margin-bottom:5.333px; padding-left:48px; font-family:Arial; font-size:10.667px">(1) The Company acquired the remaining 50% interest from the joint venture partner on April 10, 2006.</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.8px; font-family:Arial" align=justify>Inter-company balances and transactions have been eliminated upon consolidation. Investments where the Company has an ownership of 50% and funds its proportionate share of expenditures are accounted for using the proportionate consolidation method. &nbsp;Investments where the Company has an ownership of less than 50% and funds its proportionate share of expenditures are accounted for under the equity method. The Company has no investments in entities in which its ownership interest is accounted for using the cost method. </P>
<P style="margin-top:0px; margin-bottom:6.667px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">13</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:75.6px; text-indent:-37.8px; font-family:Arial" align=justify><U>c)</U></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:75.6px; font-family:Arial" align=justify><U>Revenue Recognition:</U> Revenue is recognized upon delivery when title and risk of ownership of metals or metal bearing concentrate passes to the buyer and when collection is reasonably assured. The passing of title to the customer is based on the terms of the sales contract. Product pricing is determined at the point revenue is recognized by reference to active and freely traded commodity markets.</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>Under our concentrate sales contracts with third-party smelters, final commodity prices are set on a specified quotational period, typically ranging from one month prior to shipment, and can extend to three months after the shipment arrives at the smelter and is based on average market metal prices. Revenues are recorded under these contracts at the time title passes to the buyer based on the expected settlement period. The contracts, in general, provide for a provisional payment based upon provisional assays and quoted metal prices. Final settlement is based on the average applicable price for a specified future period, and generally occurs from three to six months after shipment. Variations between the price recorded at the shipment date and the actual final price set under the smelting contracts are caused by changes in metal prices, and result in an embedded derivative in the accounts receivable. &nbsp;
The embedded derivative is recorded at fair value each period until the final settlement occurs, with changes in fair value classified as a component of revenue. Final sales are settled using smelter weights and final settlement assays (average of assays exchanged and/or umpire assay results). </P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>Third party smelting and refining costs are recorded as a reduction of revenue. </P>
<P style="margin-top:0px; margin-bottom:6.667px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:75.6px; text-indent:-37.8px; font-family:Arial" align=justify><U>d)</U></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:75.6px; font-family:Arial" align=justify><U>Accounts Receivable:</U> &nbsp;The Company has 10 customers that account for 100% of the concentrate and dor&#232; sales revenue. &nbsp;The loss of certain of these customers or curtailment of purchases by such customers could have a material adverse affect on the Company&#146;s results of operations and financial condition.</P>
<P style="margin-top:0px; margin-bottom:6.667px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:75.6px; text-indent:-37.8px; font-family:Arial" align=justify><U>e)</U></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:75.6px; font-family:Arial" align=justify><U>Reclassifications:</U> Certain reclassifications of prior year balances have been made to conform to current year presentation.</P>
<P style="margin-top:13.333px; margin-bottom:-16px; font-family:Arial"><B>3.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:48px; font-family:Arial"><B>Acquisition of Manantial Espejo (Minera Triton S.A.) mining assets</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>In April, 2006, Pan American completed the acquisition of 50 percent interest in the Manantial Espejo project from Silver Standard Resources Inc.&nbsp; The transaction, gives the Company a 100 percent interest in Manantial Espejo. &nbsp;The purchase price was 1.95 million common shares of Pan American valued at approximately $47.4 million. &nbsp;The measurement of the purchase consideration was based on a Pan American common share price of $24.30, representing the average closing price on the NASDAQ Stock Exchange for the two days prior to and two days after the public announcement of our purchase.</P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>The acquisition was accounted for by the purchase method of accounting and the accounts of Minera Triton have been consolidated from April 1, 2006, which was the date the Company acquired effective control and ownership of the assets and liabilities of Minera Triton.</P>
<P style="margin-top:0px; margin-bottom:13.333px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">14</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>The preliminary allocation of the fair value of assets and liabilities acquired and the consideration paid are summarized as follows:</P>
<div align="center">
  <center>

<TABLE border=0 cellspacing=0 cellpadding=0>
<TR valign="bottom">
	<TD align=left width=67% nowrap>
<FONT size=2 face="Arial">Current assets, including cash of &#36;45</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="Arial">&#36;</FONT>&nbsp;
	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="Arial">71</FONT>
	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap>
<FONT size=2 face="Arial">Plant and equipment</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap>
&nbsp;
	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="Arial">1,711</FONT>
	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap>
<FONT size=2 face="Arial">Mineral properties</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap>
&nbsp;
	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="Arial">57,201</FONT>
	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="Arial">Other</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD align=right width=11% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="Arial">1,176</FONT>
	</TD>
	<TD align=left width=4% nowrap style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap>
&nbsp;
	</TD>
	<TD align=right width=16% nowrap>
&nbsp;
	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="Arial">60,159</FONT>
	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap>
<FONT size=2 face="Arial">Less:</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap>
&nbsp;
	</TD>
	<TD align=right width=11% nowrap>

	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap>
 &nbsp; &nbsp;<FONT size=2 face="Arial">Accounts payable and accrued liabilities</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap>
&nbsp;
	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="Arial">(99</FONT>
	</TD>
	<TD align=left width=4% nowrap>
<FONT size=2 face="Arial">)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap style="border-bottom:1px solid #000000;">
 &nbsp; &nbsp;<FONT size=2 face="Arial">Future income tax liability</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD align=right width=11% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="Arial">(12,511</FONT>
	</TD>
	<TD align=left width=4% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="Arial">)</FONT>&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="Arial">Total purchase price</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="Arial">&#36;</FONT>&nbsp;
	</TD>
	<TD align=right width=11% nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="Arial">47,549</FONT>
	</TD>
	<TD align=left width=4% nowrap style="border-bottom:3px double #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap>
<FONT size=2 face="Arial">Consideration paid is as follows:</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap>
&nbsp;
	</TD>
	<TD align=right width=11% nowrap>

	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="Arial">Issue of Shares</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap>
<FONT size=2 face="Arial">&#36;</FONT>&nbsp;
	</TD>
	<TD align=right width=11% nowrap>
<FONT size=2 face="Arial">47,381</FONT>
	</TD>
	<TD align=left width=4% nowrap>
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap style="border-bottom:1px solid #000000;">
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="Arial">Acquisition costs</FONT>&nbsp;
	</TD>
	<TD align=right width=16% nowrap style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
	<TD align=right width=11% nowrap style="border-bottom:1px solid #000000;">
<FONT size=2 face="Arial">168</FONT>
	</TD>
	<TD align=left width=4% nowrap style="border-bottom:1px solid #000000;">
&nbsp;
	</TD>
</TR>
<TR valign="bottom">
	<TD align=left width=67% nowrap style="border-bottom:3px double #000000;">
&nbsp;
	</TD>
	<TD align=right width=16% nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="Arial">&#36;</FONT>&nbsp;
	</TD>
	<TD align=right width=11% nowrap style="border-bottom:3px double #000000;">
<FONT size=2 face="Arial">47,549</FONT>
	</TD>
	<TD align=left width=4% nowrap style="border-bottom:3px double #000000;">
&nbsp;
	</TD>
</TR>
</TABLE></center>
</div>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:48px; font-family:Arial" align=justify>The purchase cost was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. The Company estimated fair values based on discounted cash flows and estimates made by management. The purchase consideration for the mining assets of Manantial Espejo exceeded the carrying value of the underlying assets for tax purposes by $32.9 million. In addition, the Company considered the prior ownership basis in calculating the tax impact of the acquisition. &nbsp;These amounts have been applied to increase the carrying value of the mineral properties for accounting purposes. &nbsp;However, this did not increase the carrying value of the underlying assets for tax purposes and resulted in a temporary difference between accounting and tax values. The resulting estimated future income tax liability associated with this temporary difference of $12.5 mi
llion was also applied to increase the carrying value of the mineral properties.</P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:48px; font-family:Arial" align=justify>For purposes of presenting a summary of assets and liabilities acquired, the balance sheet of Minera Triton S. A. at April 1, 2006 has been used as a proxy for the balance sheet on April 10, 2006. The Company does not expect that the final allocation of the consideration among the assets and liabilities of the Manantial Espejo Project will materially vary from those shown above.</P>
<P style="margin-top:13.333px; margin-bottom:-16px; font-family:Arial"><B>4.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px; font-family:Arial"><B>Inventories</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>Inventories consist of the following:</P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=290.2></TD><TD width=16.133></TD><TD width=131.533></TD><TD width=18.8></TD><TD width=127.267></TD></TR>
<TR><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=290.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=147.667 colspan=2><P style="margin:0px; font-family:Arial" align=center>September 30, 2006</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=146.067 colspan=2><P style="margin:0px; font-family:Arial" align=center>December 31 2005</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000" valign=top width=290.2><P style="margin:0px; font-family:Arial">Concentrate inventory</P>
</TD><TD valign=top width=16.133><P style="line-height:14.667px; margin:0px; padding-left:-5.6px; padding-right:-6px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=131.533><P style="line-height:14.667px; margin:0px; text-indent:49.067px; font-family:Arial; font-size:12px">8,716</P>
</TD><TD valign=top width=18.8><P style="line-height:14.667px; margin:0px; padding-right:-5.6px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD valign=top width=127.267><P style="line-height:14.667px; margin:0px; text-indent:36.333px; font-family:Arial; font-size:12px">6,421</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000" valign=top width=290.2><P style="margin:0px; font-family:Arial">Direct smelting ore and stockpile ore</P>
</TD><TD valign=top width=16.133><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=131.533><P style="line-height:14.667px; margin:0px; text-indent:49.067px; font-family:Arial; font-size:12px">5,324</P>
</TD><TD valign=top width=18.8><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=127.267><P style="line-height:14.667px; margin:0px; text-indent:36.333px; font-family:Arial; font-size:12px">3,184</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000" valign=top width=290.2><P style="margin:0px; font-family:Arial">Dor&#232; and finished inventory</P>
</TD><TD valign=top width=16.133><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=131.533><P style="line-height:14.667px; margin:0px; text-indent:49.067px; font-family:Arial; font-size:12px">2,695</P>
</TD><TD valign=top width=18.8><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=127.267><P style="line-height:14.667px; margin:0px; text-indent:36.333px; font-family:Arial; font-size:12px">3,101</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=290.2><P style="margin:0px; font-family:Arial">Materials and supplies</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.133><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=131.533><P style="line-height:14.667px; margin:0px; text-indent:49.067px; font-family:Arial; font-size:12px">9,813</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=18.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=127.267><P style="line-height:14.667px; margin:0px; text-indent:36.333px; font-family:Arial; font-size:12px">6,197</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000" valign=top width=290.2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=16.133><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000" valign=top width=131.533><P style="line-height:14.667px; margin:0px; text-indent:43.067px; font-family:Arial; font-size:12px">26,548</P>
</TD><TD valign=top width=18.8><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=127.267><P style="line-height:14.667px; margin:0px; text-indent:30.333px; font-family:Arial; font-size:12px">18,903</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=290.2><P style="margin:0px; font-family:Arial">Less: non-current direct smelting ore</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.133><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=131.533><P style="line-height:14.667px; margin:0px; text-indent:41.067px; font-family:Arial; font-size:12px">(1,937)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=18.8><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=127.267><P style="line-height:14.667px; margin:0px; text-indent:28.333px; font-family:Arial; font-size:12px">(2,236)</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=290.2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:2.667px double #000000" valign=top width=16.133><P style="line-height:14.667px; margin-top:6px; margin-bottom:0px; padding-left:-5.6px; padding-right:-6px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=131.533><P style="line-height:14.667px; margin-top:6px; margin-bottom:0px; text-indent:43.067px; font-family:Arial; font-size:12px">24,611</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=18.8><P style="line-height:14.667px; margin-top:6px; margin-bottom:0px; padding-right:-5.6px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=127.267><P style="line-height:14.667px; margin-top:6px; margin-bottom:0px; text-indent:30.333px; font-family:Arial; font-size:12px">16,667</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">15</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:13.333px; margin-bottom:-16px; padding-left:37.8px; font-family:Arial"><B>5.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:37.8px; text-indent:10.2px; font-family:Arial"><B>Commodity and foreign currency contracts</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>At September 30, 2006, the Company had sold forward 3,000 tonnes of zinc at a weighted average price of $1,603 per tonne. The Company had bought 3,000 tonnes of zinc at a weighted average cost of $2,986 per tonne, settling between October and December 2006. &nbsp;These forward purchases were entered into to exactly offset all of the Company&#146;s zinc forward sales positions. &nbsp;&nbsp;&nbsp;At September 30, 2006, the cash offered prices for zinc average was $3,366 per tonne which results in a net unrealized mark-to-market loss of the Company&#146;s zinc forward contracts at that date of $4.2 million ($5.1 million of unrealized losses and $1.0 million of unrealized gains).</P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>The Company has purchased Mexican Pesos (&#147;MXN&#148;) with an aggregated nominal value of MXN 33.0 million settling between October and December 2006 at an average MXN/USD exchange rate of 11.02. &nbsp;At September 30, 2006, the mark to market value of the Company&#146;s position was $nil. </P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>At September 30, 2006 the Company had fixed the price of 800,000 ounces of its second quarter&#146;s silver production contained in concentrates, which is due to be priced in October and November of 2006 under the Company&#146;s concentrate contracts. &nbsp;The price fixed for these ounces averaged $11.80 per ounce while the spot price of silver was $11.55 per ounce on September 30, 2006, resulting in a mark to market recorded unrealized gain of $0.2 million.</P>
<P style="margin-top:13.333px; margin-bottom:-16px; padding-left:37.8px; font-family:Arial"><B>6.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:37.8px; text-indent:10.2px; font-family:Arial"><B>Mineral property, plant and equipment</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>Mineral property, plant and equipment consist of:</P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=200></TD><TD width=10.267></TD><TD width=57.867></TD><TD width=8.4></TD><TD width=64.4></TD><TD width=8.4></TD><TD width=56></TD><TD width=5.6></TD><TD width=8.2></TD><TD width=55.933></TD><TD width=9.8></TD><TD width=57.667></TD><TD width=8.867></TD><TD width=56.933></TD></TR>
<TR><TD width=200><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" width=205.333 colspan=6><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">September 30, 2006</font></P>
</TD><TD width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" width=197.4 colspan=6><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">December 31, 2005</font></P>
</TD></TR>
<TR><TD width=200><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD width=68.133 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Cost</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=72.8 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Accumulated</font></P>
<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Amortization</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=64.4 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Net Book</font></P>
<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Value</font></P>
</TD><TD width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD width=64.133 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Cost</font></P>
</TD><TD width=67.467 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Accumulated</font></P>
<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Amortization</font></P>
</TD><TD width=65.8 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Net Book</font></P>
<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Value</font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1.333px solid #000000" valign=top width=10.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1.333px solid #000000" valign=top width=57.867><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=64.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD style="border-top:1.333px solid #000000" valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1.333px solid #000000" valign=top width=8.2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1.333px solid #000000" valign=top width=55.933><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD style="border-top:1.333px solid #000000" valign=top width=9.8><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1.333px solid #000000" valign=top width=57.667><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1.333px solid #000000" valign=top width=8.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1.333px solid #000000" valign=top width=56.933><P style="margin:0px"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">&nbsp;&nbsp;Morococha mine, Per&#250;</font></P>
</TD><TD valign=top width=10.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">$</font></P>
</TD><TD valign=top width=57.867><P style="line-height:14.667px; margin:0px; text-indent:15px; font-family:Arial; font-size:12px"><font size="2">42,682</font></P>
</TD><TD valign=top width=8.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD valign=top width=64.4><P style="line-height:14.667px; margin:0px; text-indent:15.2px; font-family:Arial; font-size:12px"><font size="2">(8,472)</font></P>
</TD><TD valign=top width=8.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD valign=top width=56><P style="line-height:14.667px; margin:0px; text-indent:14.6px; font-family:Arial; font-size:12px"><font size="2">34,210</font></P>
</TD><TD valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=8.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD valign=top width=55.933><P style="line-height:14.667px; margin:0px; text-indent:15px; font-family:Arial; font-size:12px"><font size="2">34,137</font></P>
</TD><TD valign=top width=9.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD valign=top width=57.667><P style="line-height:14.667px; margin:0px; text-indent:15.2px; font-family:Arial; font-size:12px"><font size="2">(6,414)</font></P>
</TD><TD valign=top width=8.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD valign=top width=56.933><P style="line-height:14.667px; margin:0px; text-indent:14.6px; font-family:Arial; font-size:12px"><font size="2">27,723</font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">&nbsp;&nbsp;La Colorada mine, M&#233;xico</font> </P>
</TD><TD valign=top width=10.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.867><P style="line-height:14.667px; margin:0px; text-indent:15px; font-family:Arial; font-size:12px"><font size="2">28,007</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=64.4><P style="line-height:14.667px; margin:0px; text-indent:15.2px; font-family:Arial; font-size:12px"><font size="2">(4,841)</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56><P style="line-height:14.667px; margin:0px; text-indent:14.6px; font-family:Arial; font-size:12px"><font size="2">23,166</font></P>
</TD><TD valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=8.2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=55.933><P style="line-height:14.667px; margin:0px; text-indent:15px; font-family:Arial; font-size:12px"><font size="2">23,529</font></P>
</TD><TD valign=top width=9.8><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.667><P style="line-height:14.667px; margin:0px; text-indent:46.2px; font-family:Arial; font-size:12px"><font size="2">-</font></P>
</TD><TD valign=top width=8.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56.933><P style="line-height:14.667px; margin:0px; text-indent:14.6px; font-family:Arial; font-size:12px"><font size="2">23,529</font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">&nbsp;&nbsp;Quiruvilca/Huaron mines, Per&#250;</font></P>
</TD><TD valign=top width=10.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.867><P style="line-height:14.667px; margin:0px; text-indent:15px; font-family:Arial; font-size:12px"><font size="2">77,730</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=64.4><P style="line-height:14.667px; margin:0px; text-indent:9.2px; font-family:Arial; font-size:12px"><font size="2">(32,333)</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56><P style="line-height:14.667px; margin:0px; text-indent:14.6px; font-family:Arial; font-size:12px"><font size="2">45,397</font></P>
</TD><TD valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=8.2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=55.933><P style="line-height:14.667px; margin:0px; text-indent:15px; font-family:Arial; font-size:12px"><font size="2">79,860</font></P>
</TD><TD valign=top width=9.8><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.667><P style="line-height:14.667px; margin:0px; text-indent:9.2px; font-family:Arial; font-size:12px"><font size="2">(33,997)</font></P>
</TD><TD valign=top width=8.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56.933><P style="line-height:14.667px; margin:0px; text-indent:14.6px; font-family:Arial; font-size:12px"><font size="2">45,863</font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">&nbsp;&nbsp;Alamo Dorado, M&#233;xico</font></P>
</TD><TD valign=top width=10.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.867><P style="line-height:14.667px; margin:0px; text-indent:30px; font-family:Arial; font-size:12px"><font size="2">750</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=64.4><P style="line-height:14.667px; margin:0px; text-indent:24.2px; font-family:Arial; font-size:12px"><font size="2">(121)</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56><P style="line-height:14.667px; margin:0px; text-indent:29.6px; font-family:Arial; font-size:12px"><font size="2">629</font></P>
</TD><TD valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=8.2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=55.933><P style="line-height:14.667px; margin:0px; text-indent:30px; font-family:Arial; font-size:12px"><font size="2">419</font></P>
</TD><TD valign=top width=9.8><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.667><P style="line-height:14.667px; margin:0px; text-indent:30.2px; font-family:Arial; font-size:12px"><font size="2">(87)</font></P>
</TD><TD valign=top width=8.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56.933><P style="line-height:14.667px; margin:0px; text-indent:29.6px; font-family:Arial; font-size:12px"><font size="2">332</font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">&nbsp;&nbsp;Manantial Espejo, Argentina</font></P>
</TD><TD valign=top width=10.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.867><P style="line-height:14.667px; margin:0px; text-indent:21px; font-family:Arial; font-size:12px"><font size="2">7,735</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=64.4><P style="line-height:14.667px; margin:0px; text-indent:24.2px; font-family:Arial; font-size:12px"><font size="2">(808)</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56><P style="line-height:14.667px; margin:0px; text-indent:20.6px; font-family:Arial; font-size:12px"><font size="2">6,927</font></P>
</TD><TD valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=8.2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=55.933><P style="line-height:14.667px; margin:0px; text-indent:21px; font-family:Arial; font-size:12px"><font size="2">1,938</font></P>
</TD><TD valign=top width=9.8><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.667><P style="line-height:14.667px; margin:0px; text-indent:24.2px; font-family:Arial; font-size:12px"><font size="2">(227)</font></P>
</TD><TD valign=top width=8.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56.933><P style="line-height:14.667px; margin:0px; text-indent:20.6px; font-family:Arial; font-size:12px"><font size="2">1,711</font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">&nbsp;&nbsp;San Vicente mine, Bolivia</font></P>
</TD><TD valign=top width=10.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.867><P style="line-height:14.667px; margin:0px; text-indent:21px; font-family:Arial; font-size:12px"><font size="2">2,563</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=64.4><P style="line-height:14.667px; margin:0px; text-indent:24.2px; font-family:Arial; font-size:12px"><font size="2">(224)</font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56><P style="line-height:14.667px; margin:0px; text-indent:20.6px; font-family:Arial; font-size:12px"><font size="2">2,339</font></P>
</TD><TD valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=8.2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=55.933><P style="line-height:14.667px; margin:0px; text-indent:30px; font-family:Arial; font-size:12px"><font size="2">363</font></P>
</TD><TD valign=top width=9.8><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.667><P style="line-height:14.667px; margin:0px; text-indent:30.2px; font-family:Arial; font-size:12px"><font size="2">(56)</font></P>
</TD><TD valign=top width=8.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56.933><P style="line-height:14.667px; margin:0px; text-indent:29.6px; font-family:Arial; font-size:12px"><font size="2">307</font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">&nbsp;&nbsp;Other</font></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=10.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=57.867><P style="line-height:14.667px; margin:0px; text-indent:30px; font-family:Arial; font-size:12px"><font size="2">976</font></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=64.4><P style="line-height:14.667px; margin:0px; text-indent:24.2px; font-family:Arial; font-size:12px"><font size="2">(573)</font></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=56><P style="line-height:14.667px; margin:0px; text-indent:29.6px; font-family:Arial; font-size:12px"><font size="2">403</font></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=8.2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=55.933><P style="line-height:14.667px; margin:0px; text-indent:30px; font-family:Arial; font-size:12px"><font size="2">856</font></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=9.8><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=57.667><P style="line-height:14.667px; margin:0px; text-indent:21.2px; font-family:Arial; font-size:12px"><font size="2">(506 )</font></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=8.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=56.933><P style="line-height:14.667px; margin:0px; text-indent:29.6px; font-family:Arial; font-size:12px"><font size="2">350</font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=10.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.867><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=64.4><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=8.4><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=8.2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=55.933><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.8><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=57.667><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=8.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=56.933><P style="margin:0px"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=200><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">&nbsp;&nbsp;TOTAL</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=10.267><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=57.867><P style="line-height:14.667px; margin:0px; text-indent:9px; font-family:Arial; font-size:12px"><font size="2">160,443</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=8.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=64.4><P style="line-height:14.667px; margin:0px; text-indent:9.2px; font-family:Arial; font-size:12px"><font size="2">(47,372)</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=8.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=56><P style="line-height:14.667px; margin:0px; text-indent:8.6px; font-family:Arial; font-size:12px"><font size="2">113,071</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=5.6><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:2.667px double #000000" valign=top width=8.2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=55.933><P style="line-height:14.667px; margin:0px; text-indent:9px; font-family:Arial; font-size:12px"><font size="2">141,102</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=9.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=57.667><P style="line-height:14.667px; margin:0px; text-indent:9.2px; font-family:Arial; font-size:12px"><font size="2">(41,287)</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=8.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=56.933><P style="line-height:14.667px; margin:0px; text-indent:14.6px; font-family:Arial; font-size:12px"><font size="2">99,815</font></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin-top:13.333px; margin-bottom:-16px; padding-left:37.8px; font-family:Arial"><B>7.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:37.8px; text-indent:10.2px; font-family:Arial"><B>Construction in progress and investment in non-producing properties</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>The carrying values of Construction in progress are as follows:</P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=222.133></TD><TD width=21.867></TD><TD width=138.933></TD><TD width=15.733></TD><TD width=21.867></TD><TD width=157></TD></TR>
<TR><TD style="border-right:1px solid #000000" valign=top width=222.133><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=138.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>September 30, 2006</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=157><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>December 31, 2005</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000" valign=top width=222.133><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=138.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Net Book Value</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=157><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Net Book Value</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000" valign=bottom width=222.133><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Alamo Dorado, M&#233;xico</P>
</TD><TD valign=bottom width=21.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">$</P>
</TD><TD valign=bottom width=138.933><P style="line-height:14.667px; margin:0px; text-indent:62px; font-family:Arial; font-size:12px">73,398</P>
</TD><TD style="border-right:1px solid #000000" valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=21.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">$</P>
</TD><TD valign=bottom width=157><P style="line-height:14.667px; margin:0px; text-indent:51.533px; font-family:Arial; font-size:12px">34,306</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000; border-bottom:1px solid #000000" valign=bottom width=222.133><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Manantial Espejo, Argentina</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">$</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=138.933><P style="line-height:14.667px; margin:0px; text-indent:68px; font-family:Arial; font-size:12px">5,323</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:1.333px solid #000000" valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=157><P style="line-height:14.667px; margin:0px; text-indent:80.533px; font-family:Arial; font-size:12px">-</P>
</TD></TR>
<TR><TD style="border-right:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=222.133><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>TOTAL</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=21.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>$</B></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=138.933><P style="line-height:14.667px; margin:0px; text-indent:62px; font-family:Arial; font-size:12px">78,721</P>
</TD><TD style="border-right:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=21.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=157><P style="line-height:14.667px; margin:0px; text-indent:51.533px; font-family:Arial; font-size:12px">34,306</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>Acquisition costs of investment in non-producing properties together with costs directly related to mine development expenditures are deferred. &nbsp;Exploration expenditures on investment in non-producing properties are charged to operations in the period they are incurred.</P>
<P style="margin-top:0px; margin-bottom:13.333px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">16</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>The carrying values of these properties are as follows:</P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=253.867></TD><TD width=21.867></TD><TD width=129.867></TD><TD width=25.067></TD><TD width=25.067></TD><TD width=138.933></TD></TR>
<TR><TD valign=top width=253.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=129.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>September 30, 2006</P>
</TD><TD valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=138.933><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>December 31, 2005</P>
</TD></TR>
<TR><TD valign=bottom width=253.867><P style="line-height:14.667px; margin:0px; padding-left:-7.2px; font-family:Arial; font-size:12px">Morococha, Per&#250;</P>
</TD><TD valign=bottom width=21.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD valign=bottom width=129.867><P style="line-height:14.667px; margin:0px; text-indent:28.133px; font-family:Arial; font-size:12px">28,107</P>
</TD><TD valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=25.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD valign=bottom width=138.933><P style="line-height:14.667px; margin:0px; text-indent:56.6px; font-family:Arial; font-size:12px">31,052</P>
</TD></TR>
<TR><TD valign=bottom width=253.867><P style="line-height:14.667px; margin:0px; padding-left:-7.2px; font-family:Arial; font-size:12px">&#193;lamo Dorado, M&#233;xico</P>
</TD><TD valign=bottom width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=129.867><P style="line-height:14.667px; margin:0px; text-indent:28.133px; font-family:Arial; font-size:12px">89,964</P>
</TD><TD valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD width=138.933><P style="line-height:14.667px; margin:0px; text-indent:56.6px; font-family:Arial; font-size:12px">84,543</P>
</TD></TR>
<TR><TD valign=bottom width=253.867><P style="line-height:14.667px; margin:0px; padding-left:-7.2px; font-family:Arial; font-size:12px">Manantial Espejo, Argentina</P>
</TD><TD valign=bottom width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=129.867><P style="line-height:14.667px; margin:0px; text-indent:28.133px; font-family:Arial; font-size:12px">59,344</P>
</TD><TD valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=138.933><P style="line-height:14.667px; margin:0px; text-indent:62.6px; font-family:Arial; font-size:12px">1,979</P>
</TD></TR>
<TR><TD valign=bottom width=253.867><P style="line-height:14.667px; margin:0px; padding-left:-7.2px; font-family:Arial; font-size:12px">San Vicente, Bolivia</P>
</TD><TD valign=bottom width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=129.867><P style="line-height:14.667px; margin:0px; text-indent:34.133px; font-family:Arial; font-size:12px">4,662</P>
</TD><TD valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=138.933><P style="line-height:14.667px; margin:0px; text-indent:62.6px; font-family:Arial; font-size:12px">4,454</P>
</TD></TR>
<TR><TD valign=bottom width=253.867><P style="line-height:14.667px; margin:0px; padding-left:-7.2px; font-family:Arial; font-size:12px">Other</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=21.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=129.867><P style="line-height:14.667px; margin:0px; text-indent:34.133px; font-family:Arial; font-size:12px">1,383</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=bottom width=138.933><P style="line-height:14.667px; margin:0px; text-indent:62.6px; font-family:Arial; font-size:12px">1,231</P>
</TD></TR>
<TR><TD valign=bottom width=253.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=21.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=129.867><P style="line-height:14.667px; margin:0px; text-indent:22.133px; font-family:Arial; font-size:12px">183,460</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=25.067><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=25.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=right>$</P>
</TD><TD style="border-bottom:2.667px double #000000" valign=bottom width=138.933><P style="line-height:14.667px; margin:0px; text-indent:50.6px; font-family:Arial; font-size:12px">123,259</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin-top:13.333px; margin-bottom:-16px; padding-left:37.8px; font-family:Arial"><B>8.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; padding-left:37.8px; text-indent:10.2px; font-family:Arial"><B>Asset retirement and obligations</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>Reclamation and remediation costs are based principally on legal and regulatory requirements. Management estimates costs associated with reclamation of mining properties as well as remediation costs for inactive properties. The estimated undiscounted cash flows generated by our assets and the estimated liabilities for reclamation and remediation are determined using the Company&#146;s assumptions about future costs, mineral prices, mineral processing recovery rates, production levels and capital and reclamation costs. Such assumptions are based on the Company&#146;s current mining plan and the best available information for making such estimates. On an ongoing basis, management evaluates its estimates and assumptions; however, actual amounts could differ from those based on such estimates and assumptions. </P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>The following is a description of the changes to the Company&#146;s asset retirement obligations from January 1 to September 30, 2006: </P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=436.133></TD><TD width=26.133></TD><TD width=97.267></TD></TR>
<TR><TD style="border-top:1px solid #000000" valign=top width=436.133><P style="margin:0px; font-family:Arial">Balance at December 31, 2005</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=26.133><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=97.267><P style="margin:0px; font-family:Arial" align=right>39,378</P>
</TD></TR>
<TR><TD valign=top width=436.133><P style="margin:0px; font-family:Arial">Reclamation expenditures</P>
</TD><TD valign=top width=26.133><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=97.267><P style="margin:0px; padding-right:-4.533px; font-family:Arial" align=right>(668)</P>
</TD></TR>
<TR><TD valign=top width=436.133><P style="margin:0px; font-family:Arial">Accretion</P>
</TD><TD valign=top width=26.133><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=97.267><P style="margin:0px; font-family:Arial" align=right>1,843</P>
</TD></TR>
<TR><TD valign=top width=436.133><P style="margin:0px; font-family:Arial">Alamo Dorado liability increase to September 30, 2006</P>
</TD><TD valign=top width=26.133><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=97.267><P style="margin:0px; font-family:Arial" align=right>1,587</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=436.133><P style="margin:0px; font-family:Arial">Changes in estimates</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=26.133><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=97.267><P style="margin:0px; font-family:Arial" align=right>-</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=436.133><P style="margin:0px; font-family:Arial">Balance at September 30, 2006</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=26.133><P style="margin:0px; font-family:Arial">$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=97.267><P style="margin:0px; font-family:Arial" align=right>42,140</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin-top:13.333px; margin-bottom:-16px; font-family:Arial"><B>9.</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; text-indent:24px; font-family:Arial"><B>Share capital</B></P>
<P style="margin-top:0px; margin-bottom:6.667px; font-family:Arial" align=justify>The Company completed its base shelf offering on April 18, 2006 and completed an over-allotment option of the Offering on April 21, 2006.&nbsp; The Offering consisted of 6.28 million common shares priced at $23.88 for gross proceeds of $150 million and net proceeds after deducting underwriting fees, of $142.2 million.</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:75.6px; text-indent:-37.8px; font-family:Arial" align=justify>a)</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:75.6px; font-family:Arial" align=justify>Stock Options and Share Purchase Warrants</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>Transactions concerning stock options and share purchase warrants are summarized as follows:</P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=165.867></TD><TD width=67.533></TD><TD width=16.467></TD><TD width=72></TD><TD width=12></TD><TD width=66.8></TD><TD width=16.467></TD><TD width=72.733></TD><TD width=16.133></TD><TD width=67.867></TD></TR>
<TR><TD width=165.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" width=156 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">Incentive</font></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">Stock Option Plan</font></P>
</TD><TD width=12><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" width=156 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">Share Purchase</font></P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">Warrants</font></P>
</TD><TD width=84 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">Total</font></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=165.867><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=67.533><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Shares</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.467><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Price</font></P>
</TD><TD valign=top width=12><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=66.8><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Shares</font></P>
</TD><TD valign=top width=16.467><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72.733><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Price</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.133><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=67.867><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Shares</font></P>
</TD></TR>
<TR><TD valign=top width=165.867><P style="line-height:13.333px; margin-top:5.333px; margin-bottom:0px; font-family:Arial; font-size:10.667px"><font size="2">As at December 31, 2004</font></P>
</TD><TD valign=bottom width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">1,683,574</font></P>
</TD><TD valign=bottom width=16.467><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD valign=bottom width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">9.90</font></P>
</TD><TD style="border-top:1px solid #000000" valign=bottom width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">3,809,817</font></P>
</TD><TD style="border-top:1px solid #000000" valign=bottom width=16.467><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD valign=bottom width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">9.98</font></P>
</TD><TD valign=bottom width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=bottom width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">5,493,391</font></P>
</TD></TR>
<TR><TD valign=top width=165.867><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=165.867><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Granted</font></P>
</TD><TD valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">87,000</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">16.12</font></P>
</TD><TD valign=top width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">255,781</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">16.91</font></P>
</TD><TD valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">342,781</font></P>
</TD></TR>
<TR><TD valign=top width=165.867><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Exercised</font></P>
</TD><TD valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(693,933)</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">9.15</font></P>
</TD><TD valign=top width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(1,320)</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">9.98</font></P>
</TD><TD valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(695,253)</font></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=165.867><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Cancelled</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(26,000)</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">18.16</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(26,000)</font></P>
</TD></TR>
<TR><TD valign=bottom width=165.867><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">As at December 31, 2005</font></P>
</TD><TD valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">1,050,641</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">10.88</font></P>
</TD><TD valign=top width=12><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">4,064,278</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">10.71</font></P>
</TD><TD valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">5,114,919</font></P>
</TD></TR>
<TR><TD valign=top width=165.867><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=165.867><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Granted</font></P>
</TD><TD valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">191,332</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">19.23</font></P>
</TD><TD valign=top width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">191,332</font></P>
</TD></TR>
<TR><TD valign=top width=165.867><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Exercised</font></P>
</TD><TD valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(224,308)</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">12.48</font></P>
</TD><TD valign=top width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(12,372)</font></P>
</TD><TD valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(10.08)</font></P>
</TD><TD valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(236,680)</font></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=165.867><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Cancelled</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(5,166)</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">16.36</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.467><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">(5,166)</font></P>
</TD></TR>
  <tr>
    <TD width=165.867></TD><TD width=67.533>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD><TD width=16.467>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD><TD width=72>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD><TD width=12>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD><TD width=66.8>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD><TD width=16.467>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD><TD width=72.733>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD><TD width=16.133>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD><TD width=67.867>
      <p style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"></TD>
  </tr>
  <tr>
    <TD style="border-bottom:2.667px double #000000" valign=bottom width=165.867><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">As at September 30, 2006</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=80><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">1,012,499</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=16.467><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">12.16</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=12><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:2.667px double #000000" valign=top width=66.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">4,051,906</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=16.467><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=72.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">10.77</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=16.133><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:2.667px double #000000" valign=top width=67.867><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">5,135,408</font></P>
</TD>
  </tr>
<TR><TD valign=top width=165.867><P style="margin-top:5.333px; margin-bottom:0px"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=67.533><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=16.467><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=bottom width=72><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=12><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=66.8><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=16.467><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=bottom width=72.733><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=16.133><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=bottom width=67.867><P style="margin:0px"><font size="2"><BR></font></P>
</TD></TR>
</TABLE>
<P style="margin-top:0px; margin-bottom:6px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">17</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:5.333px" align=justify><BR>
<BR>
<BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>In the three month period ending September 30, 2006, 65,000 common shares and 837 common shares were issued for proceeds of $0.6 million and $0.09 million in connection with the exercise of outstanding options and warrants, respectively.</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>In the nine month period ending September 30, 2006, 224,308 common shares and 12,372 common shares were issued for proceeds of $2.8 million and $0.2 million in connection with the exercise of outstanding options and warrants, respectively.</P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:75.6px; text-indent:-37.8px; font-family:Arial" align=justify>b)</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:75.6px; font-family:Arial" align=justify>Share Option Plan</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>The Company has a comprehensive stock option plan for its employees, directors and officers. &nbsp;The plan provides for the issuance of incentive stock options to acquire up to a total of 10% of the issued and outstanding common shares of the Company on a non-diluted basis. &nbsp;The exercise price of each option shall be the weighted average trading price of the Company&#146;s stock on the five days prior to the award date. &nbsp;The options can be granted for a maximum term of 10 years with vesting provisions determined by the Board of Directors. &nbsp;The Company used as its assumptions for calculating the value of the stock options granted a discount rate between 3.81% and 3.88%, volatility between 29.59 and 38.00 percent, expected lives between 1.5 and 3.1 years, and an exercise price of Cdn $22.04 per share.</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>The following table summarizes information concerning stock options outstanding as at September 30, 2006:</P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=116.267></TD><TD width=16.267></TD><TD width=63.733></TD><TD width=94.667></TD><TD width=125.333></TD><TD width=18.667></TD><TD width=89.333></TD><TD width=96></TD></TR>
<TR><TD valign=top width=116.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=80 colspan=2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" width=220 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">Options Outstanding</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=204 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center><font size="2">Options Exercisable</font></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=116.267><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Range of Exercise Prices</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=80 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Weighted average exercise price</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=94.667><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Number Outstanding as at September 30, 2006</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=125.333><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Weighted Average Remaining Contractual Life (months)</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=108 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Weighted average exercise price</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=96><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=center><font size="2">Number &nbsp;outstanding and exercisable as at September 30, 2006</font></P>
</TD></TR>
<TR><TD valign=bottom width=116.267><P style="line-height:13.333px; margin:0px; text-indent:12.8px; font-family:Arial; font-size:10.667px"><font size="2">$ &nbsp;4.48</font></P>
</TD><TD valign=bottom width=16.267><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD valign=bottom width=63.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">4.48</font></P>
</TD><TD valign=bottom width=94.667><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">175,000</font></P>
</TD><TD valign=bottom width=125.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">49.51</font></P>
</TD><TD valign=bottom width=18.667><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD valign=bottom width=89.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">4.48</font></P>
</TD><TD valign=bottom width=96><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">175,000</font></P>
</TD></TR>
<TR><TD valign=top width=116.267><P style="line-height:13.333px; margin:0px; text-indent:12.8px; font-family:Arial; font-size:10.667px"><font size="2">$ &nbsp;7.98 - $10.76</font></P>
</TD><TD valign=top width=16.267><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=63.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">8.82</font></P>
</TD><TD valign=top width=94.667><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">322,333</font></P>
</TD><TD valign=top width=125.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">15.80</font></P>
</TD><TD valign=top width=18.667><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=89.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">8.79</font></P>
</TD><TD valign=top width=96><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">222,333</font></P>
</TD></TR>
<TR><TD valign=top width=116.267><P style="line-height:13.333px; margin:0px; text-indent:12.8px; font-family:Arial; font-size:10.667px"><font size="2">$12.94 - $18.86</font></P>
</TD><TD valign=top width=16.267><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=63.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">16.68</font></P>
</TD><TD valign=top width=94.667><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">288,000</font></P>
</TD><TD valign=top width=125.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">33.66</font></P>
</TD><TD valign=top width=18.667><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=89.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">17.27</font></P>
</TD><TD valign=top width=96><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">128,000</font></P>
</TD></TR>
<TR><TD valign=top width=116.267><P style="line-height:13.333px; margin:0px; text-indent:12.8px; font-family:Arial; font-size:10.667px"><font size="2">$19.77 - $24.01</font></P>
</TD><TD valign=top width=16.267><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=63.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">19.49</font></P>
</TD><TD valign=top width=94.667><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">227,166</font></P>
</TD><TD valign=top width=125.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">45.65</font></P>
</TD><TD valign=top width=18.667><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=89.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">13.51</font></P>
</TD><TD valign=top width=96><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">21,438</font></P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=116.267><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=16.267><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=63.733><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">12.70</font></P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=94.667><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">1,012,499</font></P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=125.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">34.36</font></P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=18.667><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align="right"><font size="2">$</font></P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=89.333><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">9.95</font></P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=96><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin: 0px" align="right"><font size="2">546,771</font></P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>During the nine months ended September 30, 2006, the Company recognized $0.9 million of stock-based compensation expense related to stock option grants.</P>
<P style="margin-top:0px; margin-bottom:6.667px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:-16px; padding-left:75.6px; text-indent:-37.8px; font-family:Arial" align=justify>c)</P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:75.6px; font-family:Arial" align=justify>Earnings Per Share (Basic and Diluted)</P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=0.533></TD><TD width=164.067></TD><TD width=11></TD><TD width=63.467></TD><TD width=76.533></TD><TD width=13.067></TD><TD width=47.6></TD><TD width=1.133></TD><TD width=13.733></TD><TD width=54.133></TD><TD width=78.6></TD><TD width=9.133></TD><TD width=50.867></TD><TD width=1.467></TD></TR>
<TR><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=bottom width=0.533><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" width=164.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><font size="2">For the three months ended September 30</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=212.8 colspan=6 align="center"><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><font size="2">2006</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=207.933 colspan=6 align="center"><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><font size="2">2005</font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=74.467 colspan=2 align="center"><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2">Income (Numerator)</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=76.533 align="center"><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2">Shares (Denominator)</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=60.667 colspan=2 align="center"><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2">Per-Share Amount</font></P>
</TD><TD valign=top width=69 colspan=3 align="center"><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2">Income (Numerator)</font></P>
</TD><TD valign=top width=78.6 align="center"><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2">Shares (Denominator)</font></P>
</TD><TD valign=top width=61.467 colspan=3 align="center"><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2">Per-Share Amount</font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="line-height:13.333px; margin-top:5.333px; margin-bottom:0px; font-family:Arial; font-size:10.667px"><font size="2">Net Income Available to Common Shareholders</font></P>
</TD><TD valign=bottom width=11><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD valign=bottom width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">16,350</font></P>
</TD><TD valign=bottom width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=bottom width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD style="border-top:1px solid #000000" valign=bottom width=14.867 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD style="border-top:1px solid #000000" valign=bottom width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">172</font></P>
</TD><TD style="border-top:1px solid #000000" valign=bottom width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD style="border-top:1px solid #000000" valign=bottom width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-top:1px solid #000000" valign=bottom width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="margin:0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">Basic EPS</font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">16,350</font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">76,007,433</font></P>
</TD><TD valign=top width=13.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">0.22</font></P>
</TD><TD valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">172</font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">66,973,830</font></P>
</TD><TD valign=top width=9.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">0.00</font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">Effect of Dilutive Securities:</font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Convertible Debentures</font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">4</font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">68,130</font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">74,922</font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Stock Options</font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">546,771</font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">874,308</font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="line-height:13.333px; margin:0px; text-indent:21.067px; font-family:Arial; font-size:10.667px"><font size="2">Warrants</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">4,064,278</font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">4,064,412</font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px"><font size="2">Diluted EPS</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:2.667px double #000000" valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">16,354</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">80,686,612</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=13.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">0.20</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=14.867 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">172</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">71,987,472</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=9.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">0.00</font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.6 colspan=2><P style="font-size:2pt"><font size="2">&nbsp;</font></P></TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=14.867 colspan=2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=52.333 colspan=2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px"><font size="2"><BR></font></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">18</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=center><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=164.8></TD><TD width=11></TD><TD width=63.467></TD><TD width=76.533></TD><TD width=13.067></TD><TD width=47.6></TD><TD width=14.867></TD><TD width=54.133></TD><TD width=78.6></TD><TD width=9.133></TD><TD width=50.867></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=164.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">For the nine months ended September 30</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=211.667 colspan=5 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">2006</font></P>
</TD><TD style="border-bottom:1px solid #000000" width=207.6 colspan=5 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;2005</font></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=164.8><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=11 align="center"><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=63.467 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2"><BR></font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=76.533 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2"><BR></font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=13.067 align="center"><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=47.6 align="center"><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=14.867 align="center"><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=54.133 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2"><BR></font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=78.6 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2"><BR></font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=9.133 align="center"><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=50.867 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=74.467 colspan=2 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Income (Numerator)</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=76.533 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Shares (Denominator)</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=60.667 colspan=2 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Per-Share Amount</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=69 colspan=2 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;Income (Numerator)</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=78.6 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Shares (Denominator)</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=60 colspan=2 align="center"><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Per-Share Amount</font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="line-height:13.333px; margin-top:5.333px; margin-bottom:0px; font-family:Arial; font-size:10.667px"><font size="2">Net Income Available to Common Shareholders</font></P>
</TD><TD valign=bottom width=11><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD valign=bottom width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">28,527</font></P>
</TD><TD valign=bottom width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=bottom width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=14.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD valign=bottom width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">917</font></P>
</TD><TD valign=bottom width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=bottom width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=bottom width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2"><BR></font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Basic EPS</font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">28,527</font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">72,789,973</font></P>
</TD><TD valign=top width=13.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">0.39</font></P>
</TD><TD valign=top width=14.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">917</font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">66,943,226</font></P>
</TD><TD valign=top width=9.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">0.01</font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Effect of Dilutive Securities:</font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Convertible Debentures</font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">12</font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">68,130</font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">$</font></P>
</TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">28</font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">74,922</font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Stock Options</font></P>
</TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">546,771</font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">874,308</font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Warrants</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">4,064,278</font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=14.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">-</font></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">4,064,412</font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=top width=164.8><P style="font-size: 10.667px; line-height: 13.333px; font-family: Arial; margin-top: 5.333px; margin-bottom: 0px"><font size="2">&nbsp;</font></P></TD><TD valign=top width=11><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=13.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=14.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD><TD valign=top width=9.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><font size="2">&nbsp;</font></P></TD><TD valign=top width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2"><BR></font></P>
</TD></TR>
<TR><TD valign=bottom width=164.8><P style="line-height: 13.333px; font-family: Arial; font-size: 10.667px; margin-top: 5.333px; margin-bottom: 0px"><font size="2">Diluted EPS</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=11><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=63.467><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">28,539</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=76.533><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">77,469,152</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=13.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=47.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">0.37</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=14.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=54.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">945</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=78.6><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">71,956,868</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=9.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align=right><font size="2">$</font></P>
</TD><TD style="border-bottom:2.667px double #000000" valign=top width=50.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><font size="2">0.01</font></P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin-top:0px; margin-bottom:6.667px" align=justify><BR></P>
<P style="margin-top:0px; margin-bottom:6.667px; padding-left:37.4px; font-family:Arial" align=justify>Potentially dilutive securities totaling nil for the quarter and nine months ended September 30, 2006 and 62,608 shares for the quarter and nine months ended September 30, 2005 (arising from exercisable stock options) were not included as their effect would be anti-dilutive.</P>
<P style="margin-top:0px; margin-bottom:6.667px" align=justify><BR></P>
<P style="font-family: Arial; margin-top: 13.333px; margin-bottom: -16px"><B>10.</B></P>
<P style="text-indent: 48px; font-family: Arial; margin-top: 0px; margin-bottom: 13.333px"><B>Changes in non-cash working capital Items </B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>The following table summarizes the changes in non-cash working capital items:</P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=15.733></TD><TD width=191.6></TD><TD width=6.267></TD><TD width=21.867></TD><TD width=51.667></TD><TD width=6.267></TD><TD width=21.867></TD><TD width=69.267></TD><TD width=0.667></TD><TD width=6.267></TD><TD width=23></TD><TD width=66.067></TD><TD width=6.267></TD><TD width=23.467></TD><TD width=69.4></TD><TD width=6.267></TD></TR>
<TR><TD valign=top width=207.333 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=177.2 colspan=6><P style="margin:0px; font-family:Arial" align=center>Three Months Ended</P>
</TD><TD valign=top width=201.4 colspan=8><P style="margin:0px; font-family:Arial" align=center>Nine months Ended</P>
</TD></TR>
<TR><TD valign=top width=207.333 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=177.2 colspan=6><P style="margin:0px; font-family:Arial" align=center>September 30,</P>
</TD><TD valign=top width=201.4 colspan=8><P style="margin:0px; font-family:Arial" align=center>September 30,</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=207.333 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=79.8 colspan=3><P style="margin:0px; font-family:Arial" align=center>2006</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=98.067 colspan=4><P style="margin:0px; font-family:Arial" align=center>2005</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=95.333 colspan=3><P style="margin:0px; font-family:Arial" align=center>2006</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=105.4 colspan=4><P style="margin:0px; font-family:Arial" align=center>2005</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">Accounts receivable </P>
</TD></center><TD valign=top width=21.867><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><center><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(6,660)</P>
</TD><TD valign=top width=21.867><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">(155)</P>
</TD><TD valign=top width=23><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(15,204)</P>
</TD><TD valign=top width=23.467><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">5,666</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">Inventories</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(3,519)</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">(1,416)</P>
</TD><TD valign=top width=23><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(6,370)</P>
</TD><TD valign=top width=23.467><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(2,147)</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">Prepaid expenses</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(1,295)</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">(553)</P>
</TD><TD valign=top width=23><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(1,058)</P>
</TD><TD valign=top width=23.467><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(1,571)</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">Accounts payable and accrued liabilities</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">5,439</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">2,722</P>
</TD><TD valign=top width=23><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">27,745</P>
</TD><TD valign=top width=23.467><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(1,738)</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">Other</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">710</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">(1,120)</P>
</TD><TD valign=top width=23><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">742</P>
</TD><TD valign=top width=23.467><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(907)</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=197.867 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=21.867><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(5,325)</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=21.867><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">(522)</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=23><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">5,855</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=23.467><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">(697)</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px"><BR></P>
<P style="font-family: Arial; margin-top: 13.333px; margin-bottom: -16px"><B>11.</B></P>
<P style="text-indent: 48px; font-family: Arial; margin-top: 0px; margin-bottom: 13.333px"><B>Supplemental cash flow information</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>The following table summarizes the supplemental cash flow information:</P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=15.733></TD><TD width=191.6></TD><TD width=6.267></TD><TD width=21.867></TD><TD width=51.667></TD><TD width=6.267></TD><TD width=21.867></TD><TD width=69.267></TD><TD width=0.667></TD><TD width=6.267></TD><TD width=23></TD><TD width=66.067></TD><TD width=6.267></TD><TD width=23.467></TD><TD width=69.4></TD><TD width=6.267></TD></TR>
<TR><TD valign=top width=207.333 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=177.2 colspan=6><P style="margin:0px; font-family:Arial" align=center>Three Months Ended</P>
</TD><TD valign=top width=201.4 colspan=8><P style="margin:0px; font-family:Arial" align=center>Nine months Ended</P>
</TD></TR>
<TR><TD valign=top width=207.333 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=177.2 colspan=6><P style="margin:0px; font-family:Arial" align=center>September 30,</P>
</TD><TD valign=top width=201.4 colspan=8><P style="margin:0px; font-family:Arial" align=center>September 30,</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=207.333 colspan=2><P style="margin:0px; font-family:Arial">Shares issued:</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top colspan=3><P style="margin:0px; font-family:Arial" align=center>2006</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top colspan=4><P style="margin:0px; font-family:Arial" align=center>2005</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top colspan=3><P style="margin:0px; font-family:Arial" align=center>2006</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top colspan=4><P style="margin:0px; font-family:Arial" align=center>2005</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">On conversion of debentures</P>
</TD><TD valign=top width=21.867><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">7</P>
</TD><TD valign=top width=21.867><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=23><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">93</P>
</TD><TD valign=top width=23.467><P style="margin:0px; font-family:Arial" align="right">$</P>
</TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">88,848</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">As compensation</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=23><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">559</P>
</TD><TD valign=top width=23.467><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">410</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">For purchase of Minera Triton</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=23><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">47,381</P>
</TD><TD valign=top width=23.467><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD></TR>
<TR><TD valign=top width=15.733><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=197.867 colspan=2><P style="margin:0px; font-family:Arial">For share purchase warrants</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=57.933 colspan=2><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=21.867><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=76.2 colspan=3><P style="font-family: Arial; margin: 0px" align="right">2,100</P>
</TD><TD valign=top width=23><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=72.333 colspan=2><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=23.467><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=75.667 colspan=2><P style="font-family: Arial; margin: 0px" align="right">2,100</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:13.333px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:0px; margin-bottom:13.333px"><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">19</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="font-family: Arial; margin-top: 13.333px; margin-bottom: -16px"><B>12.</B></P>
<P style="text-indent: 48px; font-family: Arial; margin-top: 0px; margin-bottom: 13.333px"><B>Segmented information</B></P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>Substantially all of the Company&#146;s operations are within the mining sector, conducted through operations in six countries. &nbsp;Due to differences between mining and exploration activities, the Company has a separate budgeting process and measures the results of operations and exploration activities independently. &nbsp;The Corporate office provides support to the mining and exploration activities with respect to financial, human resources and technical support.</P>
<P style="margin-top:0px; margin-bottom:13.333px; font-family:Arial" align=justify>Segmented disclosures and enterprise-wide information are as follows:</P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=168.533></TD><TD width=11.533></TD><TD width=67.667></TD><TD width=11.533></TD><TD width=67.667></TD><TD width=11.533></TD><TD width=95.8></TD><TD width=11.533></TD><TD width=90.667></TD></TR>
<TR><TD width=168.533><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=158.4 colspan=4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Revenue September 30</P>
</TD><TD width=11.533><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=198 colspan=3><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Net capital assets</P>
</TD></TR>
<TR><TD width=168.533><P style="font-size:2pt">&nbsp;</P></TD><TD width=11.533><P style="font-size:2pt">&nbsp;</P></TD><TD width=67.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>2006</P>
</TD><TD width=11.533><P style="font-size:2pt">&nbsp;</P></TD><TD width=67.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>2005</P>
</TD><TD width=11.533><P style="font-size:2pt">&nbsp;</P></TD><TD width=95.8><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>September 30, </P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>2006</P>
</TD><TD width=11.533><P style="font-size:2pt">&nbsp;</P></TD><TD width=90.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>December 31, </P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>2005</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000" width=168.533><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Peru</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">141,196</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">69,792</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=95.8><P style="font-family: Arial; margin: 0px" align="right">107,902</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=90.667><P style="font-family: Arial; margin: 0px" align="right">105,281</P>
</TD></TR>
<TR><TD valign=top width=168.533><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Canada</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=95.8><P style="font-family: Arial; margin: 0px" align="right">190</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=90.667><P style="font-family: Arial; margin: 0px" align="right">190</P>
</TD></TR>
<TR><TD valign=top width=168.533><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Mexico</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">28,239</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">14,738</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=95.8><P style="font-family: Arial; margin: 0px" align="right">187,010</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=90.667><P style="font-family: Arial; margin: 0px" align="right">142,258</P>
</TD></TR>
<TR><TD valign=top width=168.533><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">United States</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=95.8><P style="font-family: Arial; margin: 0px" align="right">1,191</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=90.667><P style="font-family: Arial; margin: 0px" align="right">1,198</P>
</TD></TR>
<TR><TD valign=top width=168.533><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Argentina</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=95.8><P style="font-family: Arial; margin: 0px" align="right">71,924</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=90.667><P style="font-family: Arial; margin: 0px" align="right">3,691</P>
</TD></TR>
<TR><TD valign=top width=168.533><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Bolivia</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">3,424</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=95.8><P style="font-family: Arial; margin: 0px" align="right">7,035</P>
</TD><TD valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=90.667><P style="font-family: Arial; margin: 0px" align="right">4,762</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=168.533><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Total</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">172,859</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=67.667><P style="font-family: Arial; margin: 0px" align="right">84,530</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=95.8><P style="font-family: Arial; margin: 0px" align="right">375,252</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=11.533><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD style="border-top:1px solid #000000; border-bottom:2.667px double #000000" valign=top width=90.667><P style="font-family: Arial; margin: 0px" align="right">257,380</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=199.733></TD><TD width=15.867></TD><TD width=59.733></TD><TD width=17.733></TD><TD width=63.133></TD><TD width=15.733></TD><TD width=96.067></TD><TD width=15.733></TD><TD width=68.267></TD><TD width=15.733></TD><TD width=67.8></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=199.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=435.8 colspan=10><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>For the nine months ended September 30, 2006</P>
</TD></TR>
<TR><TD width=199.733 rowspan=2><P style="margin:0px" align=center><BR></P>
</TD><TD width=15.867 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=140.6 colspan=3><P style="line-height:14.667px; margin-top:3px; margin-bottom:3px; font-family:Arial; font-size:12px" align=center>Mining Operations</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=96.067 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Development and exploration</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=68.267 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Corporate</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=67.8 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Total</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=59.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Mexico</P>
</TD><TD style="border-bottom:1px solid #000000" width=17.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=63.133><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Peru</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000" width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Revenue from external customers</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">10,680</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">53,147</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">441</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">64,268</P>
</TD></TR>
<TR><TD width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Depreciation and amortization</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(1,388)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(2,738)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(78)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(30)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(4,234)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Reclamation accretion</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(84)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(531)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(615)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Interest and financing expense</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(87)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(87)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Investment and other income</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">1</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(22)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(211)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">2,188</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">1,956</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Loss on commodity and foreign</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;currency contracts</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(676)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(676)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Exploration expense</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(243)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(831)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(1,153)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(40)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(2,267)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Income (loss) before taxes</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">3,325</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">23,141</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(1,595)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(118)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">24,753</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Net income (loss) for the period</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=59.733><P style="font-family: Arial; margin: 0px" align="right">3,325</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">14,974</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(1,319)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(625)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">16,355</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Property, plant and equipment &nbsp;&nbsp;</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;capital expenditures</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">1,987</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">4,700</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">11,204</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">135</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">18,026</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Segment assets</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">36,341</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">196,373</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">229,574</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">168,479</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">630,767</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px" align=justify><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=199.733></TD><TD width=15.867></TD><TD width=59.733></TD><TD width=17.733></TD><TD width=63.133></TD><TD width=15.733></TD><TD width=96.067></TD><TD width=15.733></TD><TD width=68.267></TD><TD width=15.733></TD><TD width=67.8></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=199.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=435.8 colspan=10><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>For the three months ended September 30, 2005</P>
</TD></TR>
<TR><TD width=199.733 rowspan=2><P style="margin:0px" align=center><BR></P>
</TD><TD width=15.867 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=140.6 colspan=3><P style="line-height:14.667px; margin-top:3px; margin-bottom:3px; font-family:Arial; font-size:12px" align=center>Mining Operations</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=96.067 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Development and exploration</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=68.267 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Corporate</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=67.8 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Total</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=59.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Mexico</P>
</TD><TD style="border-bottom:1px solid #000000" width=17.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=63.133><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Peru</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000" width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Revenue from external customers</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">5,355</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">24,731</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">30,086</P>
</TD></TR>
<TR><TD width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Depreciation and amortization</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(1,489)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(2,274)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(8)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(17)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(3,788)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Reclamation accretion</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">157</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(892)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(735)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Interest and financing expense</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(154)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">28</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(126)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Investment and other income</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(5)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">13</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">420</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">913</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">1,341</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Loss on commodity and foreign</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;currency contracts</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(2,198)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(2,198)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Exploration expense</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(511)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(193)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">159</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(545)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Income (loss) before taxes</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(1,803)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">2,279</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(271)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(1,112)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">93</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Net income (loss) for the period</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=59.733><P style="font-family: Arial; margin: 0px" align="right">(1,803)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">3,358</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(271)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(1,112)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">172</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Property, plant and equipment &nbsp;&nbsp;</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;capital expenditures</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">1,695</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">2,740</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">11,764</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">283</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">16,482</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Segment assets</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">59,693</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">136,518</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">112,882</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">62,012</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">371,105</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR></P>
<P style="margin:0px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">20</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="line-height:18.667px; margin:0px; font-family:Arial; font-size:16px; page-break-before:always"><B>Pan American Silver Corp.</B></P>
<P style="margin:0px; font-family:Arial">Notes to Unaudited Interim Consolidated Financial Statements</P>
<P style="margin:0px; font-family:Arial">As at September 30, 2006 and 2005 and for the three month periods then ended</P>
<P style="margin:0px; padding-bottom:4px; font-family:Arial; border-bottom:1px solid #000000">(Tabular amounts are in thousands of US dollars, except for numbers of shares, price per share and per share amounts)</P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px" align=justify><BR>
<BR>
<BR></P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=200.667></TD><TD width=15.8></TD><TD width=59.133></TD><TD width=0.667></TD><TD width=16.133></TD><TD width=63.867></TD><TD width=15.733></TD><TD width=96></TD><TD width=15.733></TD><TD width=68.267></TD><TD width=15.733></TD><TD width=68.267></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=200.667><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=435.333 colspan=11><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>For the nine months ended September 30, 2006</P>
</TD></TR>
<TR><TD width=200.667 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=15.8 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" width=139.8 colspan=4><P style="line-height:14.667px; margin-top:3px; margin-bottom:3px; font-family:Arial; font-size:12px" align=center>Mining Operations</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=96 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Development and exploration</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=68.267 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Corporate</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=68.267 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Total</P>
</TD></TR>
<TR><TD style="border-bottom:1.333px solid #000000" width=59.133><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Mexico</P>
</TD><TD style="border-bottom:1.333px solid #000000" width=16.8 colspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" width=63.867><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Peru</P>
</TD></TR>
<TR><TD style="border-top:1.333px solid #000000" width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Revenue from external customers</P>
</TD><TD style="border-top:1.333px solid #000000" width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.133><P style="font-family: Arial; margin: 0px" align="right">28,239</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right">141,196</P>
</TD><TD style="border-top:1.333px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1.333px solid #000000" valign=top width=96><P style="font-family: Arial; margin: 0px" align="right">3,424</P>
</TD><TD style="border-top:1.333px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1.333px solid #000000" valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD style="border-top:1.333px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1.333px solid #000000" valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">172,859</P>
</TD></TR>
<TR><TD width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Depreciation and amortization</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.133><P style="font-family: Arial; margin: 0px" align="right">(4,449)</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right">(7,169)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96><P style="font-family: Arial; margin: 0px" align="right">(171)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(91)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(11,880)</P>
</TD></TR>
<TR><TD valign=top width=200.667><P style="line-height:14.667px; margin:0px; padding-left:18.933px; text-indent:-18.933px; font-family:Arial; font-size:12px">Reclamation accretion</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=59.133><P style="font-family: Arial; margin: 0px" align="right">(252)</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=63.867><P style="font-family: Arial; margin: 0px" align="right">(1,591)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=96><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=68.267><P style="font-family: Arial; margin: 0px" align="right">(1,843)</P>
</TD></TR>
<TR><TD width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Interest and financing expenses</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.133><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right">(300)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(136)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(436)</P>
</TD></TR>
<TR><TD width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Investment and other income</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.133><P style="font-family: Arial; margin: 0px" align="right">(10)</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right">(389)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96><P style="font-family: Arial; margin: 0px" align="right">(155)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">3,850</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">3,296</P>
</TD></TR>
<TR><TD width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Loss on commodity and foreign</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">&nbsp;&nbsp;&nbsp;currency contracts</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.133><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(17,286)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(17,286)</P>
</TD></TR>
<TR><TD width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Exploration expense</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.133><P style="font-family: Arial; margin: 0px" align="right">(718)</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right">(1,382)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96><P style="font-family: Arial; margin: 0px" align="right">(1,984)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(47)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(4,131)</P>
</TD></TR>
<TR><TD width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Income (loss) before taxes</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.133><P style="font-family: Arial; margin: 0px" align="right">7,085</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right">61,646</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96><P style="font-family: Arial; margin: 0px" align="right">(1,545)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(18,640)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">48,546</P>
</TD></TR>
<TR><TD width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Net income (loss) for the period</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=59.133><P style="font-family: Arial; margin: 0px" align="right">7,085</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right">42,106</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96><P style="font-family: Arial; margin: 0px" align="right">(1,320)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(19,313)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">28,558</P>
</TD></TR>
<TR><TD valign=top width=200.667><P style="line-height:14.667px; margin:0px; padding-left:18.933px; text-indent:-18.933px; font-family:Arial; font-size:12px">Property, plant and equipment </P>
<P style="line-height:14.667px; margin:0px; padding-left:18.933px; text-indent:-18.933px; font-family:Arial; font-size:12px">&nbsp;&nbsp;&nbsp;capital expenditures</P>
</TD><TD valign=top width=15.8><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=59.133><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">4,663</P>
</TD><TD valign=top width=16.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=63.867><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">11,713</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=96><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">54,560</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">336</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">71,272</P>
</TD></TR>
<TR><TD width=200.667><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Segment assets</P>
</TD><TD width=15.8><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.8 colspan=2><P style="font-family: Arial; margin: 0px" align="right">36,341</P>
</TD><TD valign=top width=16.133><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=63.867><P style="font-family: Arial; margin: 0px" align="right">196,373</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=96><P style="font-family: Arial; margin: 0px" align="right">229,574</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">168,479</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">630,767</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px"><BR></P>
<div align="center">
  <center>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=199.733></TD><TD width=15.867></TD><TD width=59.733></TD><TD width=17.733></TD><TD width=63.133></TD><TD width=15.733></TD><TD width=96.067></TD><TD width=15.733></TD><TD width=68.267></TD><TD width=15.733></TD><TD width=67.8></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=199.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=435.8 colspan=10><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>For the six months ended September 30, 2005</P>
</TD></TR>
<TR><TD width=199.733 rowspan=2><P style="margin:0px" align=center><BR></P>
</TD><TD width=15.867 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=140.6 colspan=3><P style="line-height:14.667px; margin-top:3px; margin-bottom:3px; font-family:Arial; font-size:12px" align=center>Mining Operations</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=96.067 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Development and exploration</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=68.267 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Corporate</P>
</TD><TD width=15.733 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD width=67.8 rowspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Total</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=59.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Mexico</P>
</TD><TD style="border-bottom:1px solid #000000" width=17.733><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=63.133><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align=center>Peru</P>
</TD></TR>
<TR><TD style="border-top:1px solid #000000" width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Revenue from external customers</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">14,738</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">69,792</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD style="border-top:1px solid #000000" valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">84,530</P>
</TD></TR>
<TR><TD width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Depreciation and amortization</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(3,349)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(5,944)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(8)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(30)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(9,421)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Reclamation accretion</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">490</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(2,066)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(1,674)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Interest and financing expense</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(267)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(45)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(312)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Investment and other income</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(5)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">439</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">399</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">1,605</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">2,438</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Loss on commodity and foreign</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;currency contracts</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">-</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(2,044)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(2,044)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Exploration expense</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(2)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">(511)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(2,077)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(113)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">(2,703)</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Income (loss) before taxes</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">(1,952)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">10,603</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(2,418)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(3,704)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">2,529</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Net income (loss) for the period</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD width=59.733><P style="font-family: Arial; margin: 0px" align="right">(1,952)</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">8,994</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">(2,418)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">(3,704)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">920</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Property, plant and equipment &nbsp;&nbsp;</P>
<P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;capital expenditures</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">4,033</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">12,149</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">24,639</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">(90)</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right"><BR></P>
<P style="font-family: Arial; margin: 0px" align="right">40,731</P>
</TD></TR>
<TR><TD valign=top width=199.733><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Segment assets</P>
</TD><TD valign=top width=15.867><P style="font-family: Arial; margin: 0px" align="right">$</P>
</TD><TD valign=top width=59.733><P style="font-family: Arial; margin: 0px" align="right">82,362</P>
</TD><TD valign=top width=17.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=63.133><P style="font-family: Arial; margin: 0px" align="right">136,518</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=96.067><P style="font-family: Arial; margin: 0px" align="right">89,917</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=68.267><P style="font-family: Arial; margin: 0px" align="right">63,101</P>
</TD><TD valign=top width=15.733><P style="font-family: Arial; margin: 0px" align=right>$</P>
</TD><TD valign=top width=67.8><P style="font-family: Arial; margin: 0px" align="right">371,898</P>
</TD></TR>
</TABLE>
  </center>
</div>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<P style="margin-top:13.333px; margin-bottom:3.333px" align=justify><BR></P>
<P style="margin:13.333px"><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">21</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:24px; margin-top:0px; margin-bottom:5.333px; font-family:Arial; font-size:21.333px" align=justify>Third Quarter 2006 Management&#146;s Discussion and Analysis</P>
<P style="line-height:18.667px; margin-top:24px; margin-bottom:24px; font-family:Arial; font-size:16px"><B>November 2<SUP>nd</SUP>, 2006</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>The Management's Discussion and Analysis (MD&amp;A) focuses on significant factors that affected Pan American Silver Corp.&#146;s and its subsidiaries&#146; (&#147;Pan American&#148; or the &#147;Company&#148;) performance and such factors that may affect future performance. &nbsp;The MD&amp;A for the third quarter ending September 30, 2006, and 2005, should be read in conjunction with the unaudited consolidated financial statements for the three months ended September 30, 2006 and 2005 and the related notes contained therein, which have been prepared in accordance with Canadian GAAP. &nbsp;In addition, the following should be read in conjunction with the Consolidated Financial Statements of the Company for the year ended December 31, 2005, the related MD&amp;A, and Pan American&#146;s Annual Information Form (available on SEDAR at <FONT COLOR=#0000FF><U>www.sedar.com</U></FONT>) and F
orm 40F. &nbsp;The significant accounting policies outlined within these documents have been applied consistently for the three and nine months ended September 30, 2006. &nbsp;Management evaluated the effectiveness of the Company&#146;s disclosure controls and internal controls over financial reporting as of the end of the third quarter of 2006. &nbsp;Based on this evaluation, management concluded that the Company&#146;s disclosure controls and internal controls over financial reporting were effective and hence management did not make any material changes to these controls during the third quarter of 2006. &nbsp;All figures are in United States dollars unless otherwise noted.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Some of the statements in this MD&amp;A are forward-looking statements that are subject to risk factors set out in the cautionary note contained herein.</P>
<P style="line-height:17.333px; margin-top:22px; margin-bottom:7.333px; font-family:Arial; font-size:14.667px"><B>Results of Operations </B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>The table below sets out selected quarterly results for the past thirteen quarters, which are stated in thousands of US dollars, except for the per share amounts.</P>
<TABLE style="font-size:13.333px" cellspacing=0 align=center><TR><TD width=39.267></TD><TD width=81.2></TD><TD width=29.867></TD><TD width=68.133></TD><TD width=23.333></TD><TD width=96.133></TD><TD width=30.8></TD><TD width=94.2></TD><TD width=28.933></TD><TD width=79.333></TD></TR>
<TR><TD style="border-bottom:1px solid #000000" width=39.267><P style="margin:0px; font-family:Arial" align=center><B>Year</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=81.2><P style="margin:0px; font-family:Arial" align=center><B>Quarter</B></P>
<P style="margin:0px; font-family:Arial" align=center><B>(unaudited)</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=98 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>Sales</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=119.467 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>Mine operating earnings/(loss)<SUP>(1)</SUP></B></P>
</TD><TD style="border-bottom:1px solid #000000" width=125 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>Net income/(loss) for the period</B></P>
</TD><TD style="border-bottom:1px solid #000000" width=108.267 colspan=2><P style="margin:0px; font-family:Arial" align=center><B>Basic income (loss) per share</B></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=39.267><P style="margin:0px; font-family:Arial" align=right>2006</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>Sept. 30</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">64,268</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=96.133><P style="margin:0px; text-indent:23.933px; font-family:Arial">29,221</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=94.2><P style="margin:0px; text-indent:21.4px; font-family:Arial">16,355</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="background-color:#FFFF99; border-bottom:1px solid #000000" valign=bottom width=79.333><P style="margin:0px; text-indent:22.133px; font-family:Arial">0.22</P>
</TD></TR>
<TR><TD valign=bottom width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>June 30</P>
</TD><TD valign=bottom width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">62,848</P>
</TD><TD valign=bottom width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=96.133><P style="margin:0px; text-indent:23.933px; font-family:Arial">31,060</P>
</TD><TD valign=bottom width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=94.2><P style="margin:0px; text-indent:21.4px; font-family:Arial">14,964</P>
</TD><TD valign=bottom width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=79.333><P style="margin:0px; text-indent:22.133px; font-family:Arial">0.21</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=bottom width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>March 31</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">45,744</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=96.133><P style="margin:0px; text-indent:23.933px; font-family:Arial">17,976</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=94.2><P style="margin:0px; text-indent:19.133px; font-family:Arial">(2,761)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=79.333><P style="margin:0px; text-indent:17.667px; font-family:Arial">(0.04)</P>
</TD></TR>
<TR><TD valign=bottom width=39.267><P style="margin:0px; font-family:Arial" align=right>2005</P>
</TD><TD valign=bottom width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>Dec.31</P>
</TD><TD valign=bottom width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">37,871</P>
</TD><TD valign=bottom width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">8,683</P>
</TD><TD valign=bottom width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=94.2><P style="margin:0px; text-indent:12.467px; font-family:Arial">(29,514)</P>
</TD><TD valign=bottom width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=79.333><P style="margin:0px; text-indent:17.667px; font-family:Arial">(0.44)</P>
</TD></TR>
<TR><TD valign=bottom width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="background-color:#FFFF99" valign=bottom width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>Sept. 30</P>
</TD><TD style="background-color:#FFFF99" valign=bottom width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="background-color:#FFFF99" valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">30,086</P>
</TD><TD style="background-color:#FFFF99" valign=bottom width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="background-color:#FFFF99" valign=bottom width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">4,961</P>
</TD><TD style="background-color:#FFFF99" valign=bottom width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="background-color:#FFFF99" valign=bottom width=94.2><P style="margin:0px; text-indent:38.067px; font-family:Arial">172</P>
</TD><TD style="background-color:#FFFF99" valign=bottom width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="background-color:#FFFF99" valign=bottom width=79.333><P style="margin:0px; text-indent:22.133px; font-family:Arial">0.00</P>
</TD></TR>
<TR><TD valign=bottom width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=bottom width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>June 30</P>
</TD><TD valign=bottom width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">25,358</P>
</TD><TD valign=bottom width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">4,526</P>
</TD><TD valign=bottom width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=94.2><P style="margin:0px; text-indent:28.067px; font-family:Arial">4,971</P>
</TD><TD valign=bottom width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=79.333><P style="margin:0px; text-indent:22.133px; font-family:Arial">0.07</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=bottom width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>March 31</P>
</TD><TD style="border-bottom:1px solid #000000" width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">29,086</P>
</TD><TD style="border-bottom:1px solid #000000" width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">3,488</P>
</TD><TD style="border-bottom:1px solid #000000" width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=94.2><P style="margin:0px; text-indent:19.133px; font-family:Arial">(4,223)</P>
</TD><TD style="border-bottom:1px solid #000000" width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" width=79.333><P style="margin:0px; text-indent:17.667px; font-family:Arial">(0.06)</P>
</TD></TR>
<TR><TD valign=top width=39.267><P style="margin:0px; font-family:Arial" align=right>2004</P>
</TD><TD valign=top width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>Dec. 31</P>
</TD><TD valign=top width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">30,022</P>
</TD><TD valign=top width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">3,402</P>
</TD><TD valign=top width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=94.2><P style="margin:0px; text-indent:21.4px; font-family:Arial">13,527</P>
</TD><TD valign=top width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=79.333><P style="margin:0px; text-indent:22.133px; font-family:Arial">0.21</P>
</TD></TR>
<TR><TD valign=top width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>Sept. 30</P>
</TD><TD valign=top width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">27,916</P>
</TD><TD valign=top width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">6,357</P>
</TD><TD valign=top width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=94.2><P style="margin:0px; text-indent:38.067px; font-family:Arial">358</P>
</TD><TD valign=top width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=79.333><P style="margin:0px; text-indent:22.133px; font-family:Arial">0.01</P>
</TD></TR>
<TR><TD valign=top width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>June 30</P>
</TD><TD valign=top width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">21,179</P>
</TD><TD valign=top width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">2,640</P>
</TD><TD valign=top width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=94.2><P style="margin:0px; text-indent:28.067px; font-family:Arial">3,352</P>
</TD><TD valign=top width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=79.333><P style="margin:0px; text-indent:17.667px; font-family:Arial">(0.09)<SUP>(2)</SUP></P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>March 31</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">15,708</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">2,395</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=bottom width=94.2><P style="margin:0px; text-indent:19.133px; font-family:Arial">(2,023)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=79.333><P style="margin:0px; text-indent:17.667px; font-family:Arial">(0.08)<SUP>(2)</SUP></P>
</TD></TR>
<TR><TD valign=top width=39.267><P style="margin:0px; font-family:Arial" align=right>2003</P>
</TD><TD valign=top width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>Dec.31</P>
</TD><TD valign=top width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">12,857</P>
</TD><TD valign=top width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=96.133><P style="margin:0px; text-indent:47.267px; font-family:Arial">81</P>
</TD><TD valign=top width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=94.2><P style="margin:0px; text-indent:19.133px; font-family:Arial">(2,840)</P>
</TD><TD valign=top width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=79.333><P style="margin:0px; text-indent:17.667px; font-family:Arial">(0.05)<SUP>(2)</SUP></P>
</TD></TR>
<TR><TD valign=top width=39.267><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=81.2><P style="margin:0px; padding-right:15.8px; font-family:Arial" align=right>Sept. 30</P>
</TD><TD valign=top width=29.867><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=68.133><P style="margin:0px; text-indent:16.133px; font-family:Arial">11,890</P>
</TD><TD valign=top width=23.333><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=96.133><P style="margin:0px; text-indent:30.6px; font-family:Arial">1,258</P>
</TD><TD valign=top width=30.8><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=bottom width=94.2><P style="margin:0px; text-indent:19.133px; font-family:Arial">(1,225)</P>
</TD><TD valign=top width=28.933><P style="margin:0px; font-family:Arial" align=right>$</P>
</TD><TD valign=top width=79.333><P style="margin:0px; text-indent:17.667px; font-family:Arial">(0.10)<SUP>(2)</SUP></P>
</TD></TR>
</TABLE>
<P style="margin:0px"><BR></P>
<P style="line-height:14.667px; margin-top:0px; margin-bottom:-14.667px; padding-left:49px; text-indent:-25px; font-family:Arial; font-size:12px" align=justify>(1)</P>
<P style="line-height:14.667px; margin:0px; padding-left:49px; font-family:Arial; font-size:12px" align=justify>Mine operating earnings/(loss) are equal to <I>sales</I> less <I>cost of sales</I> and <I>depreciation and amortization </I>and is a non-GAAP measure (see mine operating earnings for further explanation)</P>
<P style="line-height:14.667px; margin-top:0px; margin-bottom:-14.667px; padding-left:49px; text-indent:-25px; font-family:Arial; font-size:12px" align=justify>(2)</P>
<P style="line-height:14.667px; margin:0px; padding-left:49px; font-family:Arial; font-size:12px" align=justify>Includes charges associated with early conversion and accretion of the Debentures</P>
<P style="margin-top:0px; margin-bottom:14.667px" align=justify><BR>
<BR></P>
<P style="line-height:18.667px; margin:0px; padding-right:24px; font-family:Arial; font-size:16px">22</P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>For the three months ended September 30, 2006, the Company generated record net income of $16.4 million (basic income per share of $0.22) compared to net income of $0.2 million (basic income per share of $0.00) for the corresponding period in 2005. &nbsp;The improved financial results for the quarter are primarily due to significantly higher silver prices and record low costs per payable silver ounce (due to higher base metal by-product credits). </P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>For the nine-month period ended September 30, 2006 the Company had net income of<BR>
$28.6 million, compared to net income of $0.9 million for the corresponding period in 2005. &nbsp;Higher realized prices combined with increased silver and base metal production were the primary reasons for the dramatic increase in net income for the nine-month period ended September 30, 2006 versus the comparable 2005 period. &nbsp;Net income for the nine-month period ended September 30, 2006 includes a loss of $17.3 million relating to <I>commodity and currency contracts</I>, (compared to a loss of $2.0 million for the same period in 2005) and an <I>income tax provision</I> of $20 million (compared to an provision of $1.6 million for the same period in 2005). &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Sales</I></B> for the third quarter of 2006 were $64.3 million, a 114 per cent increase from <I>sales</I> in the corresponding period in 2005. &nbsp;<I>Sales</I> in the third quarter of 2006 benefited from significantly higher realized metal prices, increased production from the La Colorada mine, an increased quantity of concentrate shipped from the Company&#146;s Peruvian operations versus the year-earlier period (shipments of concentrate are an essential criterion for revenue recognition) and the recommencement of operations at San Vicente. &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><I>Sales</I> for the nine-month period ended September 30, 2006 of $172.9 million were more than double the <I>sales</I> for the comparable period in 2005, due primarily to the same factors described above. </P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Cost of sales</I></B> for the three months ended September 30, 2006 were $30.8 million, a 44 per cent increase from the $21.3 million recorded in the same period of 2005. &nbsp;Similar to the explanation of higher <I>sales</I> for the third quarter of 2006, <I>cost of sales</I> were higher due to (i) increased mining and milling rates at La Colorada (approximately 7 per cent higher relative to a year ago), (ii) the shipment of approximately 3,800 tonnes more concentrates from the three mines in Peru relative to the comparable period in 2005 and (iii) the recommencement of operations at San Vicente. &nbsp;<I>Cost of sales </I>were also negatively impacted by significantly increased worker&#146;s participation costs in Peru, which are based on the increased taxable income being generated by the Company&#146;s Peruvian mines. &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><I>Cost of sales</I> for the nine-month period ended September 30, 2006 were $82.7 million, which represents a 33 per cent increase over the comparable period of 2005. &nbsp;The factors described in the paragraph above plus the <I>cost of sales</I> at the San Vicente mine in Bolivia, which was operating in the first and third quarter of 2006 but not in 2005, were the primary reasons for the increase from the comparable period in 2005.</P>
<P style="margin-top:0px; margin-bottom:14.667px" align=justify><BR>
<BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
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<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Depreciation and amortization charges</I></B> for the third quarter of 2006 increased to $4.2 million from $3.8 million recorded for the corresponding period in 2005. &nbsp;For the nine-month period ended September 30, 2006, these charges increased to $11.9 million from $9.4 million a year ago. &nbsp;The higher level of concentrate shipments and milling rates at La Colorada were the main reasons for the increase in both the three-month and nine-month periods ended September 30, 2006 compared to the <I>depreciation and amortization charges</I> recorded in the respective periods of 2005.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>The significant increase in <I>sales </I>relative to <I>cost of sales </I>and<I> depreciation </I>and<I> amortization charges </I>resulted in <B><I>mine operating earnings</I></B> in the third quarter of $29.2 million, which was 489 per cent higher than the <I>mine operating earnings</I> generated in the third quarter 2005 of $5.0 million. &nbsp;During the nine-month period ended September 30, 2006, the Company generated <I>mine operating earnings</I> of $78.3 million, more than five times higher than the <I>mine operating earnings</I> of $13.0 million in the same period of 2005. &nbsp;<I>Mine operating earnings</I> are a non-GAAP measure that is widely used in the mining industry as a benchmark for results of mining operations and is used by management to monitor and assess performance at each operation.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>General and administration costs</I></B> for the three-month period ended September 30, 2006, including stock-based compensation, were $2.7 million. These costs increased from $2.1 million for the comparable quarter in 2005 due to the higher salary levels experienced across the entire mining industry and by additional costs associated with the Company&#146;s Sarbanes Oxley compliance project. &nbsp;G<I>eneral and administration costs</I> of $7.1 million for the nine-month period ended September 30, 2006 (compared to $5.4 million in the same period in 2005) increased primarily for the same reasons.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Exploration and project development </I></B>expenses for the third quarter of 2006 were $2.3 million compared to $0.4 million for the third quarter of 2005. &nbsp;The current quarter&#146;s expense consisted primarily of maintenance costs at San Vicente and exploration activities at Huaron and La Colorada. &nbsp;<I>Exploration</I> expenses for the first nine months of 2006 were $4.1 million (first nine months of 2005, $2.7 million). &nbsp;Exploration costs in the three-month and nine-month comparable periods of 2005 were incurred primarily to complete the feasibility study for the Manantial Espejo project, which is now under construction.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Asset retirement and reclamation</I></B> expense of $0.6 million in the third quarter of 2006 (third quarter 2005, $0.7 million) related to the accretion of the Company&#146;s mines closure liabilities. &nbsp;The accretion for the nine-month period ended September 30, 2006 was $1.8 million compared to $1.7 million for the same period of 2005. &nbsp;The modest increase in the accretion charge relative to last year is directly due to the Company increasing its estimate for the future consolidated mine closure liability at the end of 2005.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Interest and financing expense</I></B> incurred as a result of transactional bank fees in the third quarter of 2006 of $0.1 million was similar to the interest expenses incurred during the same period in 2005 and during the first and second quarter of 2006.</P>
<P style="margin-top:0px; margin-bottom:14.667px" align=justify><BR>
<BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
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<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Investment and other income</I></B> of $2.0 million in the third quarter of 2006 (third quarter 2005, $1.2 million) represented interest income received from cash balances the Company maintained during the quarter. &nbsp;<I>Investment and other income</I> for the nine-month period ended September 30, 2006 was $3.3 million (nine-month period of 2005, $2.4 million). &nbsp;The higher interest rate environment prevailing in 2006, combined with higher average cash balances, resulted in the increase over the comparable periods.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Loss on commodity and foreign currency contracts </I></B>amounted to $0.7 million in the current quarter compared to a loss of $2.2 million in the third quarter of 2005. &nbsp;The third quarter&#146;s loss arose as a result of the Company&#146;s silver fixing and Mexican peso hedging activities. &nbsp;The Company closed out its remaining zinc forward positions in the second quarter of 2006 and thus there was no effect on the Company&#146;s statement of operations from zinc positions in the third quarter. &nbsp;The zinc forward positions were the primary reason for the loss of $17.3 million incurred in the nine-month period ended September 30, 2006 and for the $2.0 million loss incurred in the comparable period of 2005.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B><I>Income tax provision</I></B> of $8.4 million for the third quarter was a significant increase from a $0.1 million tax credit in the comparable period of 2005 due to sharply higher taxable income generated by the Company&#146;s Peruvian entities and the fact that these entities utilized their remaining tax loss carry forwards in 2005. <I>&nbsp;Income tax provision</I> for the nine-month period ended September 30, 2006 increased to $20 million from $1.6 million recorded in the same period of 2005 due to the same reasons.</P>
<P style="line-height:17.333px; margin-top:22px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px"><B>Metal Production </B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Pan American produced 3.2 million ounces of silver in the third quarter of 2006, a 1 per cent increase from the corresponding period in 2005. &nbsp;Silver production increased by 13 per cent at La Colorada, due primarily to higher silver grades and increased milling rates as a result of restarting the sulphide plant at the mine. &nbsp;Operations were also restarted at San Vicente during the quarter and contributed 55,000 ounces of silver to Pan American&#146;s account. &nbsp;Silver production at Huaron was similar to the level achieved a year ago while lower silver grades were the primary reason for the slight drop in production at the Company&#146;s other operations relative to the comparable period in 2005. </P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Consolidated base metal production remained similar to production levels from a year ago, with higher mill tonnage offsetting the impact of lower ore grades. Please refer to the &#147;Financial &amp; Operating Highlights&#148; section of this third quarter report for a detailed breakdown of each mine&#146;s production data.</P>
<P style="line-height:17.333px; margin-top:22px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px"><B>Cash and Total Production Costs per Ounce for Payable Silver</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Consolidated cash costs for the three-month period ended September 30, 2006 were a record low of $1.57 per payable ounce of silver compared to $4.15 per ounce for the corresponding period of 2005. &nbsp;The decrease in cash costs was primarily a result of the increase in by-product credits generated from increased base metal production at higher metal prices. &nbsp;At both Morococha and Quiruvilca, the by-product credits were greater than the operating costs, resulting in cash costs per ounce of negative $5.14 and negative $0.39 respectively. &nbsp;The cash costs per ounce as compared to the same period in 2005 decreased by $7.13 at Morococha, by $3.94 at Quiruvilca and by $2.81 at Huaron. &nbsp;At La Colorada, which is a nearly pure silver mine and thus realizes only minor by-product credits, cash costs per ounce were $0.44 higher than those recorded a year ago. &nbsp;The Company&#146
;s Pyrite </P>
<P style="margin-top:0px; margin-bottom:14.667px" align=justify><BR>
<BR></P>
<P style="margin:0px"><BR></P>
<P style="margin:0px"><BR></P>
<HR style="margin-top:9.6px; margin-bottom:9.6px" noshade size=1.333>
<P style="margin:0px; page-break-before:always"><BR></P>
<P style="margin:0px"><BR></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Stockpile operation recorded higher costs than it had a year ago due to the fact that the cost structure of that operation is linked to silver prices, resulting in higher costs when silver prices are higher. &nbsp;At San Vicente, start-up costs and a cost structure linked to silver prices resulted in cash costs per ounce of $8.09, which is significantly more than the Company&#146;s long-term expectation of $3.50 per ounce.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>The Company reports the non-GAAP cash cost per ounce of payable silver in order to manage and evaluate operating performance at each of the Company&#146;s mines. &nbsp;The measure is widely used in the silver mining industry as a benchmark for performance, but does not have standardized meaning. &nbsp;To facilitate a better understanding of this measure as calculated by the Company, we have provided a detailed reconciliation of this measure to our c<I>ost of sales</I>, as shown in our unaudited Consolidated Statement of Operations for the period.</P>
<P style="margin-top:0px; margin-bottom:14.667px" align=justify><BR></P>
<TABLE style="font-size:13.333px" cellspacing=0><TR><TD width=191></TD><TD width=61.333></TD><TD width=10.4></TD><TD width=11.2></TD><TD width=65.133></TD><TD width=11.2></TD><TD width=12.133></TD><TD width=62.4></TD><TD width=15.867></TD><TD width=10.8></TD><TD width=59.733></TD><TD width=12.933></TD><TD width=11.267></TD><TD width=69.067></TD></TR>
<TR><TD valign=top width=252.333 colspan=2 rowspan=2><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=172.467 colspan=6><P style="margin:0px; font-family:Arial" align=center><B>Three months ended </B></P>
<P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD><TD valign=top width=179.667 colspan=6><P style="margin:0px; font-family:Arial" align=center><B>Nine months ended </B></P>
<P style="margin:0px; font-family:Arial" align=center><B>September 30</B></P>
</TD></TR>
<TR><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=76.333 colspan=2><P style="margin:0px; font-family:Arial" align=right><B>2006</B></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=85.733 colspan=3><P style="margin:0px; font-family:Arial" align=right><B>2005</B></P>
</TD><TD valign=top width=15.867><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=70.533 colspan=2><P style="margin:0px; font-family:Arial" align=right><B>2006</B></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=93.267 colspan=3><P style="margin:0px; font-family:Arial" align=right><B>2005</B></P>
</TD></TR>
<TR><TD width=252.333 colspan=2><P style="line-height:14.667px; margin-top:6px; margin-bottom:6px; font-family:Arial; font-size:12px" align=justify><B>Cost of sales</B></P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD width=11.2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>30,813</B></P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD width=12.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>21,337</B></P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>82,723</B></P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>62,134</B></P>
</TD></TR>
<TR><TD valign=top width=252.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Add/(Subtract)</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=62.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align="right"><b>&nbsp;</b></P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=10.8><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=11.267><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=69.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD></TR>
<TR><TD valign=top width=252.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Smelting, refining, and transportation charges</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">17,795</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">9,469</P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=10.8><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">48,474</P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=11.267><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">27,204</P>
</TD></TR>
<TR><TD valign=top width=252.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">By-product credits</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(44,424)</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(19,815)</P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=10.8><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(118,016)</P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=11.267><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(55,431)</P>
</TD></TR>
<TR><TD valign=top width=252.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Mining royalties</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">1,127</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">386</P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=10.8><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">2,812</P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=11.267><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">1,168</P>
</TD></TR>
<TR><TD valign=top width=252.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Workers participation</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(1,842)</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(261)</P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=10.8><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(5,660)</P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=11.267><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(789)</P>
</TD></TR>
<TR><TD valign=top width=252.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Change in inventories</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">225</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">733</P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=10.8><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">2,638</P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=11.267><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">2,464</P>
</TD></TR>
<TR><TD valign=top width=252.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Other</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">913</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">492</P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=10.8><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">2,479</P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=11.267><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">1,157</P>
</TD></TR>
<TR><TD style="border-bottom:1.333px solid #000000" valign=top width=252.333 colspan=2><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Minority interest adjustment</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">44</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(175)</P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=10.8><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">386</P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=11.267><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(779)</P>
</TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Cash Operating Costs</B></P>
</TD><TD valign=top width=61.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>A</B></P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>4,650</B></P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=12.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>12,165</B></P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>15,836</B></P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>37,126</B></P>
</TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Add/(Subtract)</P>
</TD><TD valign=top width=61.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=62.4><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=15.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=12.933><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=69.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Depreciation and amortization</P>
</TD><TD valign=top width=61.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">4,234</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">3,788</P>
</TD><TD valign=top width=15.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">11,880</P>
</TD><TD valign=top width=12.933><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">9,421</P>
</TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Asset retirement and reclamation</P>
</TD><TD valign=top width=61.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">615</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">736</P>
</TD><TD valign=top width=15.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">1,843</P>
</TD><TD valign=top width=12.933><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">1,674</P>
</TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Change in inventories</P>
</TD><TD valign=top width=61.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(185)</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(45)</P>
</TD><TD valign=top width=15.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">152</P>
</TD><TD valign=top width=12.933><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">1,016</P>
</TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Other</P>
</TD><TD valign=top width=61.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(22)</P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(327)</P>
</TD><TD valign=top width=15.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(91)</P>
</TD><TD valign=top width=12.933><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(245)</P>
</TD></TR>
<TR><TD style="border-bottom:1px solid #000000" valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px">Minority interest adjustment</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=61.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="border-bottom:1px solid #000000" valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(166)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right">&nbsp;</P></TD><TD style="border-bottom:1px solid #000000" valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(154)</P>
</TD><TD valign=top width=15.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(468)</P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=12.933><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><BR></P>
</TD><TD style="border-bottom:1px solid #000000" valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right">(475)</P>
</TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Production Costs</B></P>
</TD><TD valign=top width=61.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>B</B></P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>9,126</B></P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=12.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD valign=top width=62.4><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>16,163</B></P>
</TD><TD valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>29,151</B></P>
</TD><TD valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>48,518</B></P>
</TD></TR>
<TR><TD valign=top width=191><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=61.333><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=62.4><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD valign=top width=15.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=12.933><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD valign=top width=69.067><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Payable Ounces of Silver</B></P>
</TD><TD valign=top width=61.333><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>C</B></P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>2,963,597</B></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12.133><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="border-bottom:1.333px solid #000000" valign=top width=62.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align="right"><B>2,930,179</B></P>
</TD><TD valign=top width=15.867><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>9,043,186</B></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=12.933><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><b><BR></b></P>
</TD><TD style="border-bottom:1.333px solid #000000" valign=top width=69.067><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>8,479,763</B></P>
</TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Total Cash Cost per Ounce</B></P>
</TD><TD valign=top width=61.333><P style="line-height:14px; margin:0px; font-family:Arial; font-size:11.333px">(A*1000)/C</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="background-color:#E0E0E0; border-left:1.333px solid #000000; border-bottom:1.333px solid #000000" valign=top width=11.2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>1.57</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=12.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=62.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align="right"><B>4.15</B></P>
</TD><TD style="background-color:#E0E0E0" valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>1.75</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-right:1.333px solid #000000; border-bottom:1.333px solid #000000" valign=top width=69.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align="right"><B>4.38</B></P>
</TD></TR>
<TR><TD valign=top width=191><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px"><B>Total Production Costs per Ounce</B></P>
</TD><TD valign=top width=61.333><P style="line-height:14px; margin:0px; font-family:Arial; font-size:11.333px">(B*1000)/C</P>
</TD><TD valign=top width=10.4><P style="font-size:2pt">&nbsp;</P></TD><TD style="background-color:#E0E0E0; border-left:1.333px solid #000000; border-bottom:1.333px solid #000000" valign=top width=11.2><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=65.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>3.08</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=11.2><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=12.133><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=62.4><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align="right"><B>5.52</B></P>
</TD><TD style="background-color:#E0E0E0" valign=top width=15.867><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=10.8><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=59.733><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>3.22</B></P>
</TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=12.933><P style="font-size: 12px; line-height: 14.667px; font-family: Arial; margin: 0px" align="right"><b>&nbsp;</b></P></TD><TD style="background-color:#E0E0E0; border-bottom:1.333px solid #000000" valign=top width=11.267><P style="line-height: 14.667px; font-family: Arial; font-size: 12px; margin: 0px" align="right"><B>$</B></P>
</TD><TD style="background-color:#E0E0E0; border-right:1.333px solid #000000; border-bottom:1.333px solid #000000" valign=top width=69.067><P style="line-height:14.667px; margin:0px; font-family:Arial; font-size:12px" align="right"><B>5.72</B></P>
</TD></TR>
</TABLE>
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<P style="line-height:17.333px; margin-top:22px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px"><B>Liquidity and Capital Resources</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>At September 30, 2006, cash and cash equivalents plus short-term investments were $181.1 million, a $4.2 million decrease from June 30, 2006. &nbsp;The decrease is primarily due to the fact that the Company invested $18.2 million in mining assets during the quarter, which was more than the $15.3 million of cash flow generated from operating activities during the quarter. &nbsp;In addition, the Company&#146;s financing activities used $1.4 million during the quarter, primarily to repay an advance on concentrate shipments. &nbsp;The Company&#146;s investments in mining assets during the third quarter were primarily related to purchase of mining equipment and expenditures on property development at the Company&#146;s two construction projects, Alamo Dorado and Manantial Espejo, where $12 million was expended. &nbsp;Significant investments also occurred at Morococha, where $2.1 million was
 invested in mine development and at La Colorada, where $2 million was invested in underground development of the sulphide ore zones and rehabilitating the sulphide plant in preparation for its restart. &nbsp;For the nine-month period ended September 30, 2006, cash and short term investments increased by $125.8 million due mainly to the net proceeds of $142.2 million from an offering of common shares completed during the second quarter. &nbsp;The Company&#146;s operating activities generated a further $52.5 million in the nine-month period, offset by capital spending of $71.3 million, primarily at Alamo Dorado and Manantial Espejo.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Working capital at September 30, 2006 was $196.1 million, an increase of $7.1 million from June 30, 2006. &nbsp;The increase in working capital is reflected in a $6.6 million increase in accounts receivable plus an increase of $4.1 million in supplies and concentrate inventories, and a net decrease of $1.5 million in current liabilities, partially offset by decreases in cash and short term investments and in other current assets of $4.2 million and $0.9 million respectively. &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Shareholders&#146; equity at September 30, 2006 was $480.5 million, an increase of $12.5 million from shareholders&#146; equity at June 30, 2006 as a result of net income generated during the quarter of $16.4 million plus $1.2 million from the exercise of stock options. &nbsp;For the nine-month period ended September 30, 2006, Shareholders&#146; equity has increased by $223.2 million. &nbsp;This increase resulted primarily from the proceeds from the public offering of common shares of $142.2 million, from the $47.4 million acquisition of the remaining 50 per cent interest of Manantial Espejo, and from the net income generated during the period of $28.6 million. &nbsp;At September 30, 2006, the Company had 76.1 million common shares issued and outstanding. &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>The Company&#146;s financial position at September 30, 2006 and the operating cash flows that are expected over the next twelve months leads management to believe that the Company&#146;s liquid assets are more than sufficient to fund planned capital expenditures, including the construction of Alamo Dorado and Manantial Espejo, and to discharge liabilities as they come due. </P>
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<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>At the date of this MD&amp;A, the Company did not have any undisclosed material contractual obligations, or any off-balance sheet arrangements, except for $12.7 million of commitments relating to the construction of Alamo Dorado and Manantial Espejo. &nbsp;As at September 30, 2006, the Company had sold forward 3,000 tonnes of zinc at an average price of $1,603 per tonne and had bought forward 3,000 tonnes of zinc at an average of $2,986 per tonne. &nbsp;The forward zinc purchases and sales positions have matching maturities and settle between October and December of 2006. &nbsp;At September 30, 2006, the cash offered price of zinc was $3,366 per tonne, which resulted in a net unrealized mark-to-market loss of the Company&#146;s zinc forward positions of $4.2 million ($5.1 million of unrealized losses and $1 million of unrealized gains), and was recognized in the Company&#146;s second q
uarter net income.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>At the end of the third quarter of 2006, the Company had fixed the price of 800,000 ounces of silver produced during the third quarter and contained in concentrates, which are due to be priced in October and November of 2006 under the Company&#146;s concentrate contracts. &nbsp;The price fixed for these ounces averaged $11.80 per ounce while the spot price of silver was $11.55 on September 30, 2006, resulting in a mark to market gain of $0.2 million.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>In anticipation of expenditures in Mexican pesos (&#147;MXN&#148;), the Company has entered into foreign currency contracts with an aggregated nominal value of MXN 33 million settling between October 2006 and December 2006 at an average MXN/US$ exchange rate of 11.02. &nbsp;At September 30, 2006, the mark to market value of the Company&#146;s position was $ nil. &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B>Outlook</B></P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>The construction of the Company&#146;s Alamo Dorado project in Mexico was completed during October 2006, substantially on budget and on schedule, with silver dor&#232; production expected to commence in November 2006. &nbsp;The total capital cost for the construction of the project was approximately $79.9 million, which is within 4 per cent of the original feasibility study forecast of $77 million. &nbsp;The project construction was completed without the occurrence of a lost-time accident. &nbsp;Alamo Dorado is expected to produce approximately 300,000 ounces of silver in 2006 and thereafter, to average approximately 5 million ounces annually at cash costs of less that $3.00 per silver ounce.</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Construction of the Manantial Espejo project in Argentina has been advancing since its commencement in April 2006. &nbsp;Activities at the project during the third quarter were mostly related to preparations for the Southern Hemisphere&#146;s upcoming summer construction season. &nbsp;Detailed engineering design work for the main infrastructure and processing facilities is well underway with the Company&#146;s engineering contractor as well as preparatory work for the underground access ramps. &nbsp;In addition, the Company continued to fill key staffing positions during the quarter. &nbsp;Ordering of critical-path, long lead-time equipment also continued during the third quarter, including a new SAG mill. &nbsp;The Company anticipates spending an additional $17 million on the construction of Manantial Espejo over the remainder of the year, which will be funded out of the proceeds from
 the common share offering completed in the second quarter. &nbsp;Capital costs for the project are expected to be $112.3 million including working capital and normal construction contingencies, plus $18.1 million in Argentine Value Added Tax which will be refundable once the mine is in production. &nbsp;</P>
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<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify>Based on the Company&#146;s actual silver production and cash costs per ounce for the first nine months, management expects to produce approximately 13.4 million ounces of silver at cash costs of $1.60 per ounce in 2006, compared to management&#146;s forecast of 14.1 million ounces of silver at cash costs of $4.43 per ounce presented in the 2005 annual MD&amp;A. &nbsp;Cash costs per ounce are now expected to be much lower than management&#146;s original forecast due to higher than expected by-product credits from base metal sales. &nbsp;The shortfall in silver production is primarily due to a delay in restarting the sulphide operation at La Colorada compared to management&#146;s expectations at the beginning of the year. &nbsp;The sulphide plant at La Colorada was expected to restart in April 2006 and contribute approximately 0.8 million ounces of silver production in the current year.
 &nbsp;However, a delay in restarting the sulphide plant resulted in production only commencing during the third quarter and it is now expected to contribute 0.3 million ounces of silver in 2006. &nbsp;</P>
<P style="line-height:17.333px; margin-top:0px; margin-bottom:14.667px; font-family:Arial; font-size:14.667px" align=justify><B>Caution Regarding Forward Looking Statements</B></P>
<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=justify><I>THIS MD&amp;A CONTAINS &#147;FORWARD-LOOKING INFORMATION&#148; WITHIN THE MEANING OF APPLICABLE CANADIAN SECURITIES LEGISLATION. STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION EXPRESS, AS AT THE DATE OF THIS MD&amp;A, THE COMPANY&#146;S PLANS, ESTIMATES, FORECASTS, PROJECTIONS, EXPECTATIONS, OR BELIEFS AS TO FUTURE EVENTS OR RESULTS AND THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION TO, UPDATE SUCH STATEMENTS CONTAINING THE FORWARD-LOOKING INFORMATION. GENERALLY, FORWARD-LOOKING INFORMATION CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS &#147;PLANS&#148;, &#147;PROJECTS&#148; OR &#147;PROJECTED&#148;, &#147;EXPECTS&#148; OR &#147;DOES NOT EXPECT&#148;, &#147;IS EXPECTED&#148;, &#147;ESTIMATES&#148;, &#147;FORECASTS&#148;, &#147;SCHEDULED&#148;, &#147;INTENDS&#148;, &#147;ANTICIPATES&#148; OR &#147;DOES NOT ANTICIPATE&#148;, OR &#147;BELIEVES&#148;, OR VARIATIONS OF SUCH
 WORDS AND PHRASES, OR STATEMENTS THAT CERTAIN ACTIONS, EVENTS OR RESULTS &#147;MAY&#148;, &#147;CAN&#148;, &#147;COULD&#148;, &#147;WOULD&#148;, &#147;MIGHT&#148; OR &#147;WILL BE TAKEN&#148;, &#147;OCCUR&#148; OR &#147;BE ACHIEVED&#148;. STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION INCLUDE, BUT ARE NOT LIMITED TO, STATEMENTS WITH RESPECT TO TIMING AND BUDGET OF CONSTRUCTION ACTIVITIES AT ALAMO DORADO AND MANANTIAL ESPEJO, THE EXPECTED RESULTS FROM EXPLORATION ACTIVITIES, THE ECONOMIC VIABILITY OF THE DEVELOPMENT OF NEWLY DISCOVERED ORE BODIES, THE ESTIMATION OF FUTURE PRODUCTION LEVELS, EXPECTATIONS REGARDING MINE PRODUCTION COSTS, THE REQUIREMENTS FOR ADDITIONAL CAPITAL, THE RESULTS OF DRILLING, AND PAN AMERICAN SILVER&#146;S COMMITMENT TO, AND PLANS FOR DEVELOPING, NEWLY DISCOVERED AND EXISTING MINERALIZED STRUCTURES. </I></P>
<P style="margin:0px" align=justify><BR></P>
<P style="line-height:13.333px; margin:0px; font-family:Arial; font-size:10.667px" align=justify><I>STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS THAT MAY CAUSE THE ACTUAL RESULTS, LEVEL OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS OF PAN AMERICAN SILVER AND ITS OPERATIONS TO BE MATERIALLY DIFFERENT FROM THOSE EXPRESSED OR IMPLIED BY SUCH STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHERS, RISKS RELATED TO TECHNOLOGICAL AND OPERATIONAL NATURE OF THE COMPANY&#146;S BUSINESS, CHANGES IN THE POLITICAL OR ECONOMIC ENVIRONMENT, THE ACTUAL RESULTS OF CURRENT EXPLORATION ACTIVITIES, CONCLUSIONS OF ECONOMIC EVALUATIONS, CHANGES IN PROJECT PARAMETERS TO DEAL WITH UNANTICIPATED ECONOMIC FACTORS, FUTURE PRICES OF SILVER, GOLD AND OTHER BASE METALS, AS WELL AS THOSE FACTORS DESCRIBED IN THE SECTIONS RELATING TO RISK FACTORS OF PAN AMERICAN SILVER&#146;S BUSINESS FILED IN THE COMPANY&#146;S REQUIRED SECURITIES FILINGS ON SEDAR. ALTHOUGH THE COMPANY HAS ATTEMPTE
D TO IDENTIFY IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN FORWARD-LOOKING STATEMENTS, THERE MAY BE OTHER FACTORS THAT CAUSE RESULTS TO BE MATERIALLY DIFFERENT FROM THOSE ANTICIPATED, DESCRIBED, ESTIMATED, ASSESSED OR INTENDED. THERE CAN BE NO ASSURANCE THAT ANY STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION WILL PROVE TO BE ACCURATE AS ACTUAL RESULTS AND FUTURE EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN SUCH STATEMENTS. ACCORDINGLY, READERS SHOULD NOT PLACE UNDUE RELIANCE ON STATEMENTS CONTAINING FORWARD-LOOKING INFORMATION.</I></P>
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`
end
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-----END PRIVACY-ENHANCED MESSAGE-----
